Wednesday, 24 October 2007

Antidumping targets China (again)

After once being hammered by antidumping measures (duties levied against imports sold more cheaply abroad than at home) by pretty much everyone such "prosecutions" declined.

It appears that antidumping is coming back again and China is in the firing line. Such a trend, that the EU is not part of yet, is being driven by the US. The motivation for which deserves close attention. China bashing remains a popular past time.

China targeted by anti-dumping measures [FT]

Countries’ official blocks on imports have fallen to record lows, although that trend seems to be reversing as complaints against unfair competition from China increase.

New data show that “trade defence instruments” (TDIs) – principally “antidumping” duties levied against imports sold more cheaply abroad than at home and “countervailing” duties charged against government-subsidised goods – dropped to the lowest in the first half of this year since the World Trade Organisation was created in 1994.

But Cliff Stevenson, a trade consultant who collects the figures, said there had been a rapid uptick in the past three months. If the trend continued, he said, “antidumping will still be relatively low post-WTO creation but not a record low and certainly significantly above the 1980s average”.

Recent high global commodity prices have prevented many companies successfully filing antidumping cases, as it is harder to show they have been damaged by artificially low import prices.

The EU brought no antidumping cases at all in the first six months of the year, though it has brought several since and recently extended antidumping duties against Chinese energy-saving light bulbs for a year.

China has been by far the most common target of antidumping cases this year, and India the biggest user of antidumping duties.

With rising complaints from its companies against China, the US has opened a new front that the EU may follow. Washington recently reversed a two-decade precedent and imposed countervailing duties against Chinese glossy paper – used in books and packaging – despite designating China as a “non-market economy” in which prices are not set by open competition, making government subsidies hard to determine.

Since then, several more US countervailing duty cases have been opened against China as add-ons. One Washington lawyer said: “Since many subsidies are not specific to individual industries, if you prove it once you can go after the whole Chinese economy.”

Last week the US Commerce Department confirmed the duties and in the case of one Chinese company raised them to 44 per cent, more than four times higher than its preliminary levy.

Beijing has hit back by seeking to have the US duties declared illegal in the World Trade Organisation, a case that could set a vital precedent but one that may take years to resolve.

So far the EU, although it is watching the US case closely and reviewing its own use of trade defence instruments, has not followed suit with a countervailing duty case.

But Peter Power, spokesperson for Peter Mandelson, the trade commissioner, said: “I can confirm that the Commissioner is looking at the case in the context of the TDI review to see whether we should take a more proactive approach in this area.”

Mr Mandelson is holding a preliminary debate with EU member states this week.

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