BIZCHINA> Review & Analysis
EU anti-dumping abuse harms both China, EU
Updated: 2009-08-17 15:21

Since late July, the European Union (EU) has launched a series of anti-dumping actions against Chinese products, covering steel wire rod, seamless steel tubes, sodium gluconate, steel cables and aluminum road wheels.

With five cases in just three weeks, such a frequent use of anti-dumping probes and punitive duties has been unprecedented. The EU's unusual move has raised wide concern, especially when the world economy is in recession due to the financial crisis.

The EU said its decisions were taken against "unfair" trade practices of some Chinese companies, but it has so far provided no convincing evidence for its allegations.

Take as an example the case of aluminum road wheels, against which the EU started an anti-dumping probe on Thursday. The prices of China's wheels exported to the EU were much higher than in its domestic market. Is it logical for any Chinese manufacturers to "dump" their products at a loss on European markets thousands of miles away?

As by definition, dumping is the act of a manufacturer exporting a product to foreign markets at a price either lower than home market prices or below production costs.

Yet, there are indeed unfair practices. That is on the EU part. The EU has refused to disclose the list of European companies which had lodged the complaints from the very beginning when it started anti-dumping probe into Chinese aluminum road wheels.

Related readings:
EU anti-dumping abuse harms both China, EU EU launches investigation of Chinese steel rope, cable
EU anti-dumping abuse harms both China, EU EU should resist protectionism temptation
EU anti-dumping abuse harms both China, EU China files WTO complaint on EU anti-dumping measures
EU anti-dumping abuse harms both China, EU China steel imports face 24% EU duties

This violates the principle of transparency under the World Trade Organization (WTO) rules and the specific regulation of the WTO anti-dumping agreement.

Such an approach is unfair to Chinese companies as it deprives them of their vital right of defense. Besides, under EU anti-dumping rules, an investigation is not to be initiated unless the complainants represent at least 25 percent of the total EU output of the products in question. Is this fair trade practice when the EU pushes aside its own rule in its anti-dumping probe against Chinese companies?

The EU has so far refused to recognize China's market economy status. Instead, it chose Turkey as a substitute country to calculate Chinese companies' cost of producing the aluminum wheels. As a result, China was accused of dumping goods to Europe at an unreasonably low price.

But the choice is arbitrary and unfair to Chinese companies as there is no real comparison between China and Turkey in terms of economic reality or development of their relevant sectors.

(For more biz stories, please visit Industries)

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