Chinese fastener anti-dumping case won the EU's amendment to trade regulations

On July 15, 2011, the WTO Appellate Body issued a ruling report on China's suing EU anti-dumping measures against carbon steel fasteners in China, which ruled that China won the case. The case was a major case in which China entered the WTO for the first time in a decade of prosecuting the EU for its first successful case. This ruling will further obstruct the EU's anti-dumping measures and force the EU to revise relevant trade regulations.

The ruling implied that the EU had defeated in the case of fasteners such as steel or iron nuts and bolts that China had exported to China at a lower market price than in the European market.

The WTO Appellate Body stated that the EU’s anti-dumping measures against fasteners originating in China violated the WTO rules and considered that the anti-dumping duties calculation law of the EU-27 violated the fairness of trade because it used China as a single export. Businesses treat, not treat companies as separate traders. This discriminates China as a non-market economy.

The EU adopted five standards in its anti-dumping case against China, advocating treating all Chinese exporters as a whole.

However, the WTO’s Supreme Court, the WTO Appellate Body, believes that the EU’s five criteria are all ineffective. This case should be considered by a single enterprise because the current anti-dumping duties must be targeted at a certain company and cannot be targeted. a country.

This ruling means that the EU may have to adopt new regulations to lower anti-dumping tariffs, and the impact of this ruling will increase in the future.

"The WTO's verdict on the EU will force the EU to amend the law. If the EU resubmits the same standards, it would be unwise to do so," said a trade official.

China welcomes WTO ruling

“It is of great significance for the Chinese side to win the case in this case.” China’s representative at the WTO stated that “This is not only a victory for Chinese companies, but also a victory for the WTO rules, as it will help improve Chinese companies including the European Union. The competitive environment in the international market will also strengthen the WTO members' confidence in the WTO rules and the multilateral trading system."

It is understood that China represents nearly 1,700 Chinese fastener manufacturers to appeal the case to the WTO. The 1,700 companies are said to be selling steel fasteners at prices 30 to 50% lower than the EU market. In this regard, the European Union believes that Chinese manufacturers are dumping fastener products at prices below the market, which will cause significant damage to the competitiveness of the EU industry. As a result, in January 2009 the European Union decided to impose anti-dumping duties of up to 85% on Chinese fasteners for a period of five years.

However, the WTO Appellate Body stated that the EU adopted the wrong method to calculate the degree of EU damage in the anti-dumping case. The European Union has a total of more than 300 manufacturers of steel or iron fasteners, but the European Union has failed to prove most of it. Manufacturers of fasteners have been damaged, and they can only prove that only 27% of the production of steel or iron fasteners has been damaged, far from the danger that anti-dumping measures can be taken.

The possibility of the EU appealing again has not been ruled out but the possibility of EU manufacturers making another appeal in the future still exists because the WTO Appellate Body has not stated in the report that it will rule out the possibility of the EU appealing to China again.

Although the report condemned the EU's approach to treating the Chinese fastener industry as a whole, the European Union may still adopt a similar approach in other cases. "The EU is still likely to treat China as a manufacturer, such as a Chinese joint company," said a trade official.

According to another informed source of trade officials, group companies whose decision-making power is affected by the government are currently the first and foremost among anti-dumping cases, even though these companies do not belong to state ownership.

The official also stated that the case will in the future also invite more similar appeals to China and other governments that have played an important role in decision-making power in certain export industries.

It is worth mentioning that the WTO believes that the EU’s private practice of giving traders anti-dumping power against China does not violate trade regulations. This overturned the WTO’s earlier findings, which may have postponed some of the possible appeals.

So far, the EU Trade Spokesman has not given any comment.

In addition, the WTO can not force the EU to comply with the verdict, but it will impose commercial sanctions on countries that continue to violate the rules, and the final anti-dumping tax rate still needs to wait for further news from the EU. It is understood that trade dispute cases generally take several years to make a final ruling.

China is the world's largest manufacturer of fasteners such as screws, nuts, bolts, and washers, while the European Union is the largest market for fasteners in China. In 2010, the total number of fasteners exported to the EU by China was 440,000 tons, an increase of approximately 30% year-on-year.

The rapid development of Sino-European trade in recent years has enabled the European Union to become China's largest export market, while China is the second largest trading partner of the United States and the European Union.

Trade protectionism frequently refers to China

China entered the WTO in 2001. Afterwards, China’s exports to developed countries soared. There were various contradictions between China and developed countries surrounding issues such as exchange rates, public sector contracts, Chinese market access to Western companies, and “dumping” allegations. Dumping refers to the export of products to a foreign market at a cost below cost.

Due to the EU's view that there is dumping in China's fastener products, in January 2009 it was decided to impose anti-dumping duties of 26.5% to 85% on Chinese fasteners for a period of five years. In July 2009, China sued the European Union to the WTO and tried to appeal to the WTO dispute settlement mechanism. On December 3, 2010, the WTO Appellate Body issued a ruling on China’s v. anti-dumping measures on fasteners in the EU, clearly deciding that the “separate tax rate” provisions of the EU “Anti-dumping Basic Regulations” do not comply with the WTO rules.

In addition, China is also the world's largest producer of steel products. In recent years, many foreign steel product manufacturers have received appeals and believe that China has dumping behavior. At present, the United States has imposed anti-dumping duties on several types of steel products in China.

The EU and the United States have used WTO rules to allow member states to impose punitive tariffs on dumped products. They often point their finger at countries where the government plays an important role in the economy, such as China or India. However, China has also begun to systematically challenge the EU and the United States to increase the tariffs on Chinese exports.

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