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Oct 29, 2014
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Turkey launches probe of US cotton imports

By
Reuters
Published
Oct 29, 2014

NEW YORK, USA - Turkey has launched a probe into possible dumping of U.S. cotton in the country, the U.S. government and an industry group said, the third dispute over U.S. cotton in recent years and a sign of rising tensions in global trade as prices sink.

The investigation could hurt demand from the largest buyer of U.S. cotton and comes amid mounting tensions between the two countries after U.S. regulators decided against Turkey in an investigation into steel rebar imports earlier this month.


Source:cottonleads.org


Turkey was the biggest importer of U.S. upland cotton last year, buying 1.1 million bales worth about $500 million.

The Ministry of the Economy announced the investigation on Oct. 18, the U.S. National Cotton Council (NCC) said in a memo published on the American Cotton Shippers Association website on Monday.

The probe was also listed by the U.S. International Trade Administration's enforcement and compliance unit.

In a letter sent to a U.S. exporter and seen by Reuters, the ministry said it would look into unfair competition in imports of "non carded or combed" cotton originating from the United States.

The move was significant for several reasons. It came just four days after the U.S. regulators cleared the way for a 1.25 percent anti-subsidy duty on Turkish imports of steel rebar, which is used to reinforce concrete.

The NCC said the probe was initiated by the government, not at the request of the Turkish cotton industry, which the NCC said was "unusual."

It also comes at a critical time for Washington-Ankara relations, which have been strained by Turkey's reluctance to play a front-line role in the fight against Islamic State on its Syrian border.

Last Thursday, cotton industry officials held a call with the U.S. Trade Representative, Department of Commerce, Department of Agriculture, and International Trade Commission (ITC), the NCC said.

It is not clear when Ankara will complete its probe, although U.S. exporters have 37 days from Oct. 18 to respond to questions from the Turkish government as part of its research, NCC said.

Turkey has a track record of moving fairly quickly on these types of cases, concluding some in as little as six months, it said.

The case comes as the world's cotton farmers struggle with weak prices, which have plunged by a third since May on forecasts of another record surplus and falling demand from China, the world's top textile market, as Beijing overhauls its stockpiling policy.

Stress between major trade partners has also mounted. Earlier this month, the NCC accused Beijing of breaching global trade rules through its farming policy.

This is the first major dispute over U.S. cotton since Peru looked into possible dumping and countervailing in 2012-13.

At the start of this month, the United States and Brazil settled a decade-old World Trade Organization dispute over U.S. cotton subsidies for $300 million.

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