WTO condemns the EU’s discriminatory treatment of China in anti-dumping cases

Today, the World Trade Organization ("WTO") issued a Panel Report strongly condemning one of the main pillars of the EU's anti-dumping policy against China. If confirmed on appeal, the EU will be forced to amend its basic anti-dumping legislation. The EU may also need to re-examine most of the current anti-dumping measures against imports from China.

The Report was issued by the Panel in the dispute initiated by China against the EU regarding the anti-dumping measures on certain iron or steel fasteners from China (DS397). It is the first dispute ever brought by China against the EU since its accession to the WTO. The Panel's findings are, however, not limited to this dispute alone. They have important implications for the EU's anti-dumping policy as a whole.

In investigations against China and a few other former state trading countries, the EU generally imposes a single countrywide anti-dumping duty to all exporting producers. In investigations against all other WTO Members, the EU imposes individual duties per exporting producer. This country-wide duty is, moreover, generally set at a level that is significantly higher than the duties calculated for individual exporters. Chinese exporters will only be able to obtain an individual duty if they meet a number of very strict criteria aimed at demonstrating that they act independently from the State. These "individual treatment" criteria only apply to Chinese companies.

The Panel has found that this system is inconsistent with several provisions of the WTO Anti-Dumping Agreement and of the GATT. In particular, the EU rules were found to be inherently discriminatory and therefore contrary to the basic non-discrimination principle enshrined in Article I of the GATT.

This is a significant victory for China. The EU will now have to set individual anti-dumping duties for each Chinese exporter. It is expected that this may lead to a reduction in the level of the duties.

The Report also addresses a number of claims that China had raised against the anti-dumping measures that the EU had imposed on certain iron or steel fasteners. The Panel report upholds several of these claims while rejecting others. Importantly, the WTO Panel found that EU anti-dumping investigations against China are characterized by a serious and repeated lack of transparency which prevents Chinese exporters from properly defending their interests.

Van Bael & Bellis (Jean-François Bellis, Philippe De Baere, Clotilde du Parc and Eva Monard) acted as external counsel for the Chinese government.

The Panel Report (DS397) can be obtained by clicking on the following WTO website link: http://www.wto.org/english/tratop_e/dispu_e/397r_e.doc.