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On May 24, 2025, the Committee on Safeguards of the World Trade Organization (WTO) received a notification from the Government of Indonesia regarding the final determination in the safeguard investigation on imported cotton yarn.
Accordingly, the Indonesian Safeguards Committee (KPPI) determined that imports of cotton yarn into Indonesia had increased significantly in both absolute and relative terms, causing or threatening to cause serious injury to the domestic industry.
Case Details
- Initiation Date: October 27, 2023
- Investigated Product: Cotton yarn, classified under HS codes:
5204.11.10, 5204.19.00, 5204.20.00, 5205.11.00, 5205.12.00, 5205.21.00, 5205.22.00, 5205.24.00, 5205.26.00, 5205.32.00, 5205.41.00, 5205.42.00, 5205.43.00, 5205.47.00, 5205.48.00, 5206.11.00, 5206.12.00, 5206.14.00, 5206.21.00, 5206.23.00, 5206.24.00, 5206.25.00, 5206.31.00, 5206.32.00, 5206.33.00, 5206.42.00, and 5206.45.00 - Investigation Period: Initially from 2019 to 2022, later updated to cover 2021 to 2024
1. Import Trends
- In Absolute Terms: During the 2021–2024 period, imports increased by 7.3%. Despite a decline from 2022 to 2023, import volumes rebounded and grew in 2024.
- In Relative Terms: The ratio of imports to domestic production rose steadily year over year – from an index of 100 (2021) to 122 (2022), 176 (2023), and 195 (2024). The relative increase over this period was 26.70%.
2. Major Exporting Countries
In 2024, Vietnam was the largest exporter of cotton yarn to Indonesia, accounting for 42.94% of total imports. Other countries with shares exceeding 3% included:
- China: 26.88%
- India: 11.85%
- Malaysia: 4.15%
- Turkey: 3.43%
The combined share of all other countries was 2.89%. Given its significant share, Vietnam does not qualify for exclusion from the scope of the safeguard measure.
3. Unforeseen Developments
KPPI concluded that the surge in imports resulted from unforeseen developments, including:
- Disruption of global supply chains due to the COVID-19 pandemic
- Relocation of cotton yarn production from China to other countries amid US-China trade tensions
- India’s restrictions on raw cotton exports, leading to increased cotton yarn production and exports
- The US ban on cotton yarn imports from the Xinjiang region (China), which caused a spike in redirection of exports to Indonesia
4. Injury to the Domestic Industry
KPPI found that the domestic industry had suffered serious injury, evidenced by:
- Declining domestic market share
- Reduction in production, sales, and capacity utilization
- Job losses
- Increased financial losses
KPPI also concluded that the injury was directly caused by the surge in imports, rather than by other factors.
5. Proposed Safeguard Measure
KPPI proposed applying a specific safeguard duty on imported cotton yarn in three phases:
- Phase 1: IDR 13,419/kg
- Phase 2: IDR 12,614/kg
- Phase 3: IDR 11,809/kg
The measure will take effect upon official publication by the Indonesian Ministry of Finance.
6. Consultations
KPPI invites interested parties to request consultations within seven (07) days from the date of the Final Determination notification. Requests must be submitted in hard copy and electronically, clearly stating the name, address, email, and phone number. Consultations are expected to be held virtually.
To protect their legitimate interests, manufacturers and exporters should familiarize themselves with the procedure and actively contact Vietnamese law firms specializing in anti-dumping and trade remedy for timely assistance.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
ASL LAW is the top-tier Vietnam law firm for Anti-dumping & countervailing. If you need any advice, please contact us for further information or collaboration.
