Monday

18th Dec 2017

EU seeks to strengthen measures on Chinese dumping

  • The EU is trying to protect itself from massive Chinese steel imports (Photo: Tata Steel Europe)

The European Commission presented new anti-dumping measures on Wednesday (9 November) that are mainly aimed at countering Chinese steel imports.

The commission wants to change the way it calculates dumping when products come from a country where the economy is distorted because of state intervention.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

According to the proposal, the EU will scrap the usual distinction made between countries with a market economy status (MES) and countries which are not recognised as such. It proposes treating all members of the World Trade Organisation (WTO) in the same way.


So the EU will continue to impose anti-dumping duties on products from WTO countries when it is proved that these products enter the EU at dumped prices.

It will also continue to apply the standard rules by which dumping is calculated by comparing the price of an imported product with its domestic price in the exporting country.

But when the state intervenes in a country's domestic market, the EU will also compare the price of a product imported to the EU with its price on another comparable market - the US, for example. Until now that methodology was applied only to non-market economy countries.

This country-neutral system will allow the EU to face Chinese cheap imports independently of the communist-run country's status inside the WTO.


China says it is entitled to get the MES at the end of this year, 15 years after it joined the WTO.

The EU, which has been debating the issue since the start of the year, is wary of recognising China as a market economy, but is obliged to respect WTO rules.

Faced with an influx of Chinese imports that destabilises EU industry, especially in the steel sector, and an anti-trade backlash in public opinion, the commission is trying to find a middle way.

It said in July that the most important issue was not China's status but how the EU can defend itself. The country-neutral system is how it wants to achieve that.

The anti-dumping reform also runs in parallel to a discussion between member states over so-called trade defence instruments, in particular the level of duties on imports, that was revived by EU leaders at their last summit in October to address growing opposition to free trade.

"We need to be able, when needed, to shield our manufacturers from unfair competition," EU trade commissioner Cecilia Malmstroem told journalists on Wednesday.

She said the EU had to find "the right balance between openness and robust trade defence instruments".

China will not be treated as a non-market economy any more, but will still be subject to special investigations when the EU suspects that it trades products under market prices.

"This does not mean today we say that China is a market economy. It clearly isn't," she said.

Specific distortions

The new method "takes into account specific distortions due to state intervention in a country or a sector", Malmstroem explained.

"When a state has such control [on its economy] that the prices and cost of exported goods do not reflect market realities, we will be able to intervene."

China reacted in a lukewarm way to the proposal. It said that it did "not completely nullify [China's] ‘surrogate country’ status, it merely allows the status quo to covertly continue".

European industries were even more critical.


“Instead of improving efficiency and ensuring effectiveness of EU anti-dumping measures, the commission’s new proposal makes European industries even more vulnerable,” said Milan Nitzschke, the spokesman for AEGIS Europe, a federation of 30 manufacturing industries.

He said that the reform "completely abandons" market economy criteria and "substantially weakens the basis for EU anti-dumping measures".

EU still divided on Chinese steel

Despite growing political pressure, trade ministers at a meeting Friday are not expected to reinforce EU trade defense against Chinese dumping.

EUobserved

The EU and China's velvet power

China is pushing its influence through the New Silk Road project and wooing of world media.

Ceta failure deepens EU trade crisis

Canada said on Friday that the free-trade agreement with the EU had failed and that the bloc was "not capable" of concluding agreements.

Opinion

EU dumping plan could ensure fairer China trade

A European Commission proposal on anti-dumping clears the way for the EU to abide by international obligations and avoid a trade war that would be dangerously counterproductive.

EU delays decision on trade defence

Trade ministers send a discussion on the level of import duties back to diplomats, also admitting that TTIP talks with the US are "in the freezer".

News in Brief

  1. EU-UK Brexit trade deal by January 2021, official says
  2. Bitcoin is 'deadly', Danish central bank warns
  3. EU Commission wants to ban 'legal weed'
  4. France files €10m complaint against Amazon
  5. EU negotiators reach deal on 'circular economy'
  6. Poll: Tight race in Catalonia days before elections
  7. EU: Israel built 8,000 settler homes in six months
  8. China agrees to promote London as centre for yuan

Stakeholders' Highlights

  1. Counter BalanceA New Study Challenges the Infrastructure Mega Corridors Agenda
  2. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  3. Plastics Recyclers Europe65% plastics recycling rate attainable by 2025 new study shows
  4. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  5. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  6. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  7. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  8. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  9. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  10. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  11. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  12. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?

Stakeholders' Highlights

  1. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  2. EPSUEU Blacklist of Tax Havens Is a Sham
  3. EU2017EERole of Culture in Building Cohesive Societies in Europe
  4. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage
  5. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  6. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  7. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  8. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  9. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  10. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  11. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  12. Dialogue PlatformThe Turkey I No Longer Know