China wins fastener tiff with EU

World trade body rules tariffs illegal, more steps pledged to protect domestic industry after spate of trade disputes

China scored a major victory in its seven-year trade dispute with the European Union on Jan 18 after the World Trade Organization ruled in favor of Chinese fastener makers.

The EU decision to impose hefty tariffs on fastener imports from China during the past seven years is illegal, the WTO said in its ruling. China, for its part, will take more concrete steps to protect the rights of its domestic exporters, the Ministry of Commerce said.

Chen Fuli, deputy director-general of the department of treaty and law at the ministry, said China would forward a trade retaliation request to the WTO to force the EU to remove the anti-dumping duties on Chinese fasteners if the EU does not negotiate terms or remove such an unfair duty after the ruling.

Normally, it takes up to 15 months for countries to amend rules and withdraw anti-dumping duties after a WTO ruling on trade disputes.

China is the world's biggest producer of screws, nuts, bolts and washers, and the EU is a major destination for its fasteners, which are used for a wide range of products from aircraft, high-speed trains and automotive parts to furniture.

China shipped $1 billion worth of fastener products to the EU in 2008, but that had fallen to $80 million by 2014 after the EU decided to impose anti-dumping duties of up to 85 percent on China's fasteners for five years in January 2009. On July 31, 2009, China took the case to the WTO's dispute settlement mechanism, the country's first such case against the EU.

China currently has more than 8,000 fastener enterprises, including more than 6,000 private businesses. The industry employs 200,000 people and exported products worth $5.24 billion to global markets such as the United States, Russia, Japan, Germany and Brazil in 2014, according to the National Development and Reform Commission, the top economic planner.

Gu Weiping, general manager of Jiaxing Xiongdi Fastener Co, says the WTO ruling is definitely a major victory for China. "We will be closely watching how it is implemented by the EU."

Since the Netherlands, Spain, the Czech Republic and Italy are still major fastener exporters and are backed by their respective industry associations, trade unions and local governments, Gu says the EU is "may delay the implementation or only partially implement the WTO ruling".

zhongnan@chinadaily.com.cn

(China Daily European Weekly 01/22/2016 page26)