Geneva: China initiated a trade case on Friday against the European Union (EU), accusing the 27-nation bloc of illegally taxing imports of Chinese steel fasteners needed for products from furniture to cars.
Beijing’s complaint at the World Trade Organization (WTO) alleges that the EU import charges were “neither impartial nor transparent.” The result is charges that unfairly penalize the “legitimate commercial interests of over 1,700 Chinese fastener producers.”
The dispute between Brussels and Beijing is highly sensitive. The EU accuses Chinese manufacturers of breaking global trade rules by selling a flood of screws at 30% to 50% below European prices, but China’s exporters contend that their screws are weaker and less expensive than those made in Europe.
In January, the EU slapped Chinese exporters with trade charges ranging between 26.5% and 85% for five years, arguing that below-cost selling by Chinese companies prevented European producers from gaining extra market share as sales boomed in recent years.
China’s complaint Friday starts a 60-day consultation period, after which the Asian country can ask the WTO to set up an investigative panel. WTO cases can result in retaliatory trade sanctions being authorized, but generally only after years of litigation.
The EU said the antidumping charges on the fasteners were imposed in January in full compliance with WTO rules. Governments investigate dumping when they suspect foreign producers are exporting goods at artificially low prices usually as a result of subsidies or in an attempt to corner a market.
“Antidumping measures are not about protectionism. They are about fighting unfair trade,” said EU trade spokesman Lutz Guellner.
“The decision to impose measures was taken on the basis of clear evidence that unfair dumping of Chinese products has taken place with state distortion of raw material prices,” he said. “This is harming the otherwise competitive EU industry, with potentially dire long-term effects.”
Chinese screwmakers complained in February that the EU’s actions would hurt consumers without helping European producers. Manufacturers from Jiaxing city in Zhejiang province in eastern China representing a quarter of Chinese screw exports say they are unfairly being singled out because they charge the same as Taiwanese producers and more than rivals based in Malaysia, Vietnam and India.