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China Sees EU Steel Duties As Unwarranted, Protectionist

by Mary Swire,, Hong Kong

31 January 2017

China's Ministry of Commerce (MOC) says it is strongly against the imposition by the European Union of substantial anti-dumping (AD) duties on Chinese steel product exports into the European Union.

On January 27, the European Commission concluded that imports of stainless steel tube and pipe butt-welding fittings from China and Taiwan were causing injury to the EU manufacturing industry. It concluded that the Chinese exports were being sold to the EU market at below Chinese market prices – a practice known as dumping.

Imports of the product, which is used to join pipes and tubes of stainless steel in the petro-chemical, food processing, shipbuilding, energy generation, and construction industries, will now be subject to AD margins ranging from 30.7 percent to 64.9 percent, while Taiwanese exports will face ADs of 5.1 percent to 12.1 percent.

The Commission noted that the EU currently has an unprecedented number of trade defense measures targeting imports of steel products in place, with a total of 39 AD and anti-subsidy countervailing duty measures. 17 of those duties are on products originating from China.

It added that it has been using the available toolbox of trade defense instruments to the fullest extent possible, but that it is also tackling the causes of overcapacity in the global steel industry through active involvement in the Global Forum on Steel Excess Capacity, launched last December.

However, in his comments on the latest EC action, the head of the MOC's trade remedy and investigation bureau, Wang Hejun, said that it represented trade protectionism by the EU in the steel sector and was contrary to World Trade Organization (WTO) rules.

In particular, the EU was accused of continuing to treat China as a non-market economy (NME), whereby an "analogue country" approach is applied in AD proceedings against Chinese exporters.

China has already been successful in starting World Trade Organization (WTO) dispute consultations with the United States and the EU, insisting that all WTO members should abandon the NME approach whereby domestic prices are not used as a benchmark against which to compare export prices. The MOC is insisting that all countries should now treat China as a market economy after the 15th anniversary of its WTO accession on December 11, 2016.

Wang called the continued use of the analogue country approach "unfair and unreasonable." He confirmed that the Ministry will take "the necessary measures to protect the legitimate rights of Chinese companies" against the wide AD margins imposed by the EU.

He also stressed that reduced steel demand in a weak global economy is "the root cause of the current difficulties facing the steel industry. Countries should work together to overcome those difficulties and … only resort to trade remedy measures in a prudent way."

TAGS: tax | European Commission | anti-dumping | World Trade Organisation (WTO) | China | Taiwan | manufacturing | trade disputes | United States | import duty | trade | European Union (EU) | Europe

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