UK PET import quota to operate first-come-first-served if safeguard approved

UK polyethylene terephthalate import quotas would be allocated on a first-come-first-served basis under the proposed safeguard measure, with importers responsible for monitoring available volumes and assessing the risk of incurring a 65% out-of-quota duty, a source with knowledge of the matter said Oct. 29.

HM Revenue & Customs would administer the tariff-rate quotas through the customs declaration process, while information on quota availability and remaining balances would be publicly available through the UK's Integrated Online Tariff service, according to the source.

Quota balances would be updated immediately following scheduled allocations. Market participants would not be individually notified when a quota is exhausted, leaving importers to assess the risk of incurring the out-of-quota duty when placing orders, the source added.

Virgin PET and recycled polyethylene terephthalate (R-PET) would draw from the same quota allocation, rather than having separate quotas for the two materials, meaning virgin PET and R-PET importers would compete for available volumes within their respective country quotas on a first-come, first-served basis.

The UK Trade Remedies Authority recommended a 192,963 metric tons tariff-rate quota on Oct. 23 after provisionally determining that increased PET imports caused serious injury to domestic producers. Imports exceeding the applicable quota allocation would face a 65% ad valorem duty.

Under the proposal, the EU would receive the largest allocation at 77.6%, followed by Mexico at 5.4%, Indonesia at 3.7% and Vietnam at 3.1%. A further 10.2% would form a residual quota for other countries and territories subject to the measure.

Indonesia and Vietnam did not qualify for the developing-country exemption after their respective import shares exceeded the 3% threshold, the TRA said.

The proposed measure covers both virgin and recycled PET. However, during the investigation, several interested parties called for R-PET to be excluded, citing differences in feedstocks, production processes, pricing and market dynamics, as well as R-PET's role in meeting sustainability and circular economy objectives.

The TRA provisionally rejected those arguments, finding that imported virgin and recycled PET share closely resembling physical and technical characteristics, have overlapping end uses and compete in the same UK market.

The safeguard remains subject to consultation until Nov. 22 and a final decision by the Secretary of State. If the TRA's recommendation is accepted, the Secretary of State would publish a Taxation Notice giving effect to the provisional tariff-rate quota.