EU for re­formed trade de­fense against Chi­nese dump­ing

Kuwait Times - - BUSINESS -

BRUS­SELS:

The Euro­pean Com­mis­sion pro­posed yes­ter­day a new way to as­sess whether Chi­nese man­u­fac­tur­ers are ex­porting prod­ucts such as steel at un­fairly low prices in re­sponse to Bei­jing’s de­mand for change by the end of the year. The Euro­pean Union and many of China’s other trad­ing part­ners have been de­bat­ing whether to grant China “mar­ket econ­omy sta­tus” (MES) from mid-De­cem­ber, which Bei­jing says is its right 15 years af­ter it joined the World Trade Or­ga­ni­za­tion.

For now, China is treated as a spe­cial case. EU in­ves­ti­ga­tors seek­ing to pin­point dump­ing com­pare Chi­nese ex­port prices to those of a third coun­try, such as the United States, rather than to do­mes­tic prices in China. The United States has warned China it has not done enough to qual­ify for mar­ket econ­omy sta­tus. Bei­jing has in­sisted it be treated like any other WTO mem­ber. Not do­ing so is seen as risk­ing a wave of lit­i­ga­tion and a trade war.

EU trade min­is­ters are ex­pected to dis­cuss the new anti-dump­ing mea­sures at a meet­ing on Friday along with other plans to mod­ern­ize the EU’s trade de­fence ar­se­nal.

The Com­mis­sion’s pro­posal, which would need ap­proval from the 28 mem­ber states and the Euro­pean Par­lia­ment to be­come law, says that in gen­eral the nor­mal ref­er­ence value in dump­ing cases in­volv­ing WTO mem­bers would be the do­mes­tic prices.

How­ever, if there are “sig­nif­i­cant dis­tor­tions” af­fect­ing do­mes­tic prices as well, in­ves­ti­ga­tors can in­stead use in­ter­na­tional bench­mark prices. Such sig­nif­i­cant dis­tor­tions pri­mar­ily re­late to state in­ter­fer­ence, whether di­rectly or in­di­rectly such as pub­lic pol­icy lead­ing to cheap fi­nance.

“This does not mean to­day we say that China is a mar­ket econ­omy. It clearly isn’t,” EU Trade Com­mis­sioner Ce­cilia Malm­strom told a news con­fer­ence.

Out­side, some 15,000 steel work­ers marched to de­mand ac­tion to pro­tect the sec­tor. Pro­tec­tion against Chi­nese dump­ing is a cen­tral de­mand. Steel has been the fo­cus of re­cent EU trade ac­tion against China, with many steel grades now fac­ing du­ties.

Aegis Europe, an al­liance of 30 Euro­pean man­u­fac­tur­ing in­dus­tries, said the anti-dump­ing pro­posal cru­cially shifts the bur­den of proof, mean­ing EU pro­duc­ers must show such dis­tor­tions. Un­der the cur­rent regime, it is for Chi­nese firms to prove they are op­er­at­ing un­der nor­mal mar­ket con­di­tions.

To counter this, the Com­mis­sion says it will is­sue re­ports iden­ti­fy­ing such dis­tor­tions in cer­tain coun­tries or cer­tain sec­tors. EU man­u­fac­tur­ers may be able to rely on a re­port to cal­cu­late what the nor­mal ref­er­ence price should be.

Aegis also said it cre­ated le­gal un­cer­tainty and called for im­prove­ments. The con­ser­va­tive EPP group in the Euro­pean par­lia­ment said it was important to en­sure the rules were safe from chal­lenges at the WTO. —Reuters

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