China may face more anti-dumping probes from EU

„We may well see more anti-dumping investigations particularly in historically highly protected industries, such as agriculture and textiles,” Leora Blumberg, a Hong Kong-based lawyer with US law firm Heller Ehrman LLP, said in an interview. „European countries are struggling to compete with increasingly competitive Chinese exports.” In a practice known as dumping, countries export goods at lower than domestic prices or the cost of production. The EU this month slapped duties on Chinese shoes and sneakers. China threatened retaliation, citing „legal shortcomings.” The EU yesterday imposed tariffs on ironing boards from China and the Ukraine. On October 18 it announced levies on frozen Chinese strawberries to protect Polish producers. The EU started eight anti-dumping investigations into Chinese exports in the first nine months of the year, equal to the number of probes for all of 2005, according to the European Commission's Web site. Investigations initiated this year against China for allegedly dumping goods may exceed last year's number, said Blumberg. „China is without doubt the largest target of anti-dumping action because its industries are very competitive for reasons such as low labor costs,” Blumberg said. „Anti-dumping duties can effectively wipe out any advantage that China enjoys with respect to that particular industry.” China, the world's fastest-growing major economy, saw its trade surplus with the EU swell to a record €47.6 billion ($60.7 billion) in the first seven months of the year, up 24% from a year ago.

The EU on October 18 said it imposed provisional duties of as much as 34.2% on the strawberries after applying two-year tariffs on €9.7 billion of Chinese and Vietnamese shoes and sneakers two weeks earlier. The EU imposed definitive levies on nine Chinese products last year and has imposed definitive duties on five types of Chinese products this year. The Brussels-based commission, the EU's executive body, can impose six-month, provisional anti-dumping duties. The bloc's national governments can turn those measures into five-year tariffs. An anti-dumping investigation is usually completed within a year though can take longer, Blumberg said. In the 11 years to 2005, China was the target of 469 anti-dumping investigations by WTO members, more than double the 218 probes against South Korea and the 162 against the US, according to the World Trade Organization's Web site. India initiated the highest number of inquiries, followed by the US and the EU. A total of 338 anti-dumping duties were imposed on Chinese exports during the 11-year period, according to the WTO.

China has conducted anti-dumping inquiries of its own beginning in 1997, according to Blumberg. The country carried out 123 probes from 2000 to 2005, targeting Japan, South Korea and the US the most, WTO statistics show. It applied 68 anti-dumping duties on imports from 2002 to 2005. China imposed tariffs of as much as 61% on urethane elastic fibers from the US, Singapore, Japan, South Korea and Taiwan on October 13. The nation is the world's largest producer of the material, which is used in clothes and socks. „Only in the last 20 years have developing countries started to realize that they can also play the trade game,” Blumberg said. „China is considered to be one of the new quite aggressive users of anti-dumping instruments.” (Bloomberg)