China will challenge at the World Trade Organisation (WTO) anti-dumping duties on Chinese-made screws and bolts imposed by the European Union in January, said people with knowledge of the case.
"Mofcom [China's commerce ministry] is going to seek WTO dispute settlement consultations in the EU fastener case over the legal process used by Brussels," said one of them.
If the consultations fail, Beijing could request a panel to hear the case, leading to lengthy and costly litigation. Initial consultations normally last about 60 days. It would be the first case taken by China against the EU at the global trade watchdog.
The import duties, of up to 85 per cent, target as many as 200 Chinese companies selling components widely used for cars, white goods and machinery in the EU worth some €575 million (Dh2.97 billion) a year. Chinese manufacturers had asked Beijing to take the EU to the WTO, arguing Brussels was protecting European companies amid the worst global economic slowdown in 80 years.
"I think China is absolutely right to take this step," said Robert MacLean, a partner at law firm Crowell & Moring, who represented a large portion of the Chinese industry in the EU investigation.
"These kinds of dubious decisions, where it is clear that no injury is being suffered by European industry as a result of Chinese imports, must be properly scrutinised under the WTO microscope and the necessary corrections made.
"Only this kind of action can stop the European Commission converting EU anti-dumping and trade policy into protectionism in the way that was done in this investigation," he added.
The European Commission, which oversees trade policy in the 27-nation bloc, denies being protectionist.
European producers accuse China of giving its own steel companies an unfair advantage by restricting exports of raw materials and driving down their domestic costs, and subsidising Chinese manufacturers.
International rules allow countries to impose extra duties on goods that are "dumped" – imported at prices below what is paid in their home market – if the dumping injures businesses in the importing country.
Beijing has denied distorting competition.
The Jiaxing Association of Iron and Steel Fastener Companies, representing some 20 per cent of fastener exports, was unhappy that two Chinese units of two European firms – Italy's Agrati and Celo of Spain – were exempt from the duties. (Reuters)
Decision on Asia shoe dutyThe European Commission is expected to decide in September whether to propose extending dumping duties on imports of leather shoes from China and Vietnam, but most EU states want them scrapped, said people with knowledge of the matter.
Last October, the Commission – which oversees trade policy for the 27-country European Union – extended duties of up to 16.5 per cent on Chinese leather shoes and 10 per cent on those made in Vietnam, pending a review. A majority of EU countries had opposed that move.
Industry and diplomatic sources with knowledge of the case said on Friday they expected Brussels to complete its review and submit its proposal for approval by member states by the end of September. "The Commission's proposal is expected to be submitted to member states in September. But as it stands the majority favour termination," said one person.
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