Investigation closed on Chinese, Malaysian CDS.

The European Union today (Oct. 23) dropped its threat to slap import tariffs on blank compact discs from China and Malaysia.

EU countries gave their backing to a proposal to close the investigation into whether Chinese and Malaysian exporters were selling recordable CDs in the EU below domestic prices or below the production cost, a practice known as dumping.

The move comes after EU governments came under pressure from European buyers of recordable CDs, which store data or music.

Although the European manufacturers of blank CDs could suffer from the cheap imports, their concerns were outweighed by those of importers, distributors, retailers and consumers, who benefit from the cheaper imports.

China and Malaysia, who jointly account for about half the EU market for blank CDs, have more than doubled their combined share of the market in Europe to 48% in the 12 months through June 2005 compared with 2002.

The EU already set limited anti-dumping duties of up to 39.5% on Taiwan blank CD imports in 2002. And in 2003, the EU investigated DVD+/-R imports from India. While it found insufficient evidence of dumping, the EU nonetheless uncovered unfair export subsidies, and thus set duties of 7.3%.

"Dumping is often seen to relate to any cheap or below-cost imports, but the reality is more complicated," said a spokesman for the European Commission, the EU's executive authority. "If left unchallenged, dumping gives the outside exporters an unfair competitive advantage which could hurt the EU industry."

The EU legislative procedure for anti-dumping measures usually takes at least nine months. However, the measure are set only after the inquiry looks at the broader EU interest, including that of producers, importers, users and consumers.