EU-China trade defence disputes accumulate

The number of World Trade Organization (WTO) disputes and consultations concerning anti-dumping measures between the European Union and China is spiralling upwards. On May 7 2010 China asked for a WTO panel to be established with regard to the EU anti-dumping duties on Chinese footwear. The trading partners have previously taken a dispute over the European Union's anti-dumping duties on stainless steel fasteners to a WTO panel. In addition, China has notified the European Union that it will closely follow its anti-subsidy investigation regarding coated paper and will not hesitate to initiate WTO consultations if necessary.

Two other WTO trade disputes, one of them new, involving the European Union deserve mention. The first concerns carbon steel fasteners. In December 2008 officials in China initiated an anti-dumping investigation concerning carbon steel fasteners imported from the European Union, and imposed provisional measures on EU-originating imports of the product. The European Union is now fighting back through the WTO. On May 10 2010 the European Union launched consultations with China over the procedures that prompted the imposition of these provisional measures. It is reported that the EU disputes the method by which the Chinese authorities calculated the duties. Officials from China maintain that the duties are warranted, given the evidence of dumping and injury to the Chinese industry.

The second concerns a joint complaint filed by Taiwan, the United States and Japan against European Union tariffs on three categories of high-tech products: set-top boxes with communication functions, flat-panel displays and multifunctional devices that fax, scan and/or copy documents. China is intervening as a third party in this dispute. Any outcome to this dispute will affect imports into the European Union of the products concerned from all WTO members, and not just those that brought the complaint. The WTO Information Technology Agreement requires that signatory countries eliminate tariffs on around 180 IT products, including computers, semiconductors and telecommunications equipment. Therefore, the tariffs for such products should be 0%. The European Union - wrongly, in the opinion of the complainants - subjects set-top boxes to a tariff of 13.9%, flat-panel displays to a tariff of 14% and multifunctional copy/scan/fax devices to a tariff of 6%. Pursuant to the complaint against the EU tariffs on these three products, a WTO dispute panel was meant to issue a final ruling by December 2009, failing which a deadline of March 2010 was set. It was reported earlier in May 2010 that the deadline has been put back once again, this time to early July 2010.

Two new EU trade defence actions may affect businesses which source their goods from China. On May 20 2010 the European Commission initiated an investigation concerning glass fibre mesh originating in China. Why the EU glass fibre mesh industry has decided to lodge a complaint may only be speculated upon, but in December 2009, the EU initiated an anti-dumping investigation into glass fibre filament products - the source material for EU producers of glass mesh. With the threat of anti-dumping duties on their input material looming, EU producers of glass fibre mesh may have been prompted to request that defensive measures be taken against finished glass fibre mesh imported from China.

Another trade defence investigation that was initiated on May 20 2010 concerns ring-binder mechanisms originating in Thailand. It has been reported that the commission suspects dumping by exporter Thai Stationery, which is a subsidiary of the Chinese company Wah Hing Stationery Manufactory Ltd. Thai Stationery is said to have been thriving since 2004, despite a small decline in sales in 2007. The leading EU producer, Ring Allianz, has claimed that Thai Stationery inflates its productivity data, thus lowering its per-unit production cost and suppressing any resulting evidence of dumping. It also alleges that the Thai producer provided EU officials with inaccurate data on the cost of raw materials and production costs.

Also concerning ring-binders, the leading producer of this product in China, Worldwide Stationery, has set up operations in India. Exports from India to the European Union have also been rising. Ring Allianz is said to be monitoring these exports for evidence of dumping.

Finally, with regard to anti-dumping news, the EU General Court's decision in the case concerning the anti-dumping investigation on imports of footwear originating in China was published in the Official Journal on May 1 2010. Footwear producers such as Brosmann Footwear, Seasonable Footwear, Lung Pao Footwear and Risen Footwear argued against the commission's determinations on sampling and market economy treatment. The court dismissed all the applicant's claims, and its conclusions consolidate the commission's discretionary powers in anti-dumping investigations.

Originally published in ILO newsletter. Republished with author's authorization.