China extends anti-subsidy duties on EU potato starch import for another 5 years

China's Ministry of Commerce has decided to extend anti-subsidy duties levied on potato starch (in Chinese) imported from the EU for another five years, starting Saturday.

Potato starch imports from the EU are subject to anti-subsidy duties ranging from 7.5 to 12.4 percent, according to an Ministry of Commerce ruling on Sept. 17, 2011.

The latest decision followed a review launched a year ago that found the domestic industry could be harmed if anti-dumping duties were discontinued.

The initial case for the anti-subsidy duties was launched in 2010, with the decision to apply countervailing duties until mid-September 2016. The justification for the anti-subsidy duties at the time was the EU potato starch support scheme.

However, on July 1, 2012, the EU quota system in relation to the production of potato starch came to an end. Despite this significant policy change, the Chinese Minister of Commerce has still decided to prolong the duty.

Starch Europe, the trade association representing the interests of the EU starch industry, expresses disappointment with the decision as well as with the lack of justification.

Starch Europe:
 

“Starch Europe deeply regrets that the Chinese Minister of Commerce did not provide any justification supporting the decision to extend the application of the countervailing duties and questions the arguments provided in the final disclosure of basic facts supporting the decision of the MOFCOM.”

The Financial Times point out that a 2014 analysis in the University of Miami International and Comparative Law Review found that little information was available on the investigation of China’s anti-dumping claims, “making it difficult to assess whether this determination targeted predatory dumping rather than normal competition.”

The anti-subsidy duty is not the only duty the European Potato Starch Manufacturers face when exporting potato starch to China. The anti-subsidy duty comes on top of an anti-dumping duty ranging from 12.6% to 56.7%, dating back to August 2006. The anti-dumping duty is up for review in February 2018.

Potato starch is widely used in the food industry. The Ministry of Commerce data showed China's apparent consumption of potato starch rose from 330,000 tonnes in 2012 to 400,000 tonnes in 2015.