The European Union’s new anti dumping proposals are “insufficient and dangerous,” said European manufacturing lobby group Aegis Europe, which represents 28 industry sectors for over €500 billion in turnover.
The group has asked for radical and substantial changes for two main reasons.
The first is because the EU position does not explain on which legal basis the duties “of tomorrow” will be decided and it links dumping with “significant market distortions” (what is important for one is not for another).
The second is because it shifts the burden of the proof from Chinese producers on the EU industry.
Aegis Europe’s position is an attempt at modernization that contrasts with the EU’s political need to not hinder the accession of China to the WTO on December 11 (after 15 years of transition, despite still lacking the criteria of a market economy).
It also reflects a European dichotomy between manufacturing countries suffering from unfair dumping and importers which receive “Made in China” containers in the Atlantic ports.
The Commission’s proposal does not openly mention China’s protocol of accession to the WTO. The five criteria (the US had six) used to define a market economy are no longer binding. Moreover, China is compared in principle to any international partner, except for showing the existence of “significant distortions.” But doing so could take longer and cost more.
“Without a certain legal basis and impeccable reports, the risk is that China take legal action against the WTO and wins it, destroying us,” said Matteo Scarparo (shoe makers trade group Assocalzaturifici).
“In my sector alone, 400,000 jobs are at risk,” said Mauro Cibaldi (aluminum producers).
Currently, in a normal situation, duties are calculated by comparing the export price with production and sales prices in the exporting country (or in a “similar” country).
In the future, dumping will be calculated based on a list of global prices and production costs. Uncertainty remains on which and how many criteria will be decided and how much they will weigh. An indication should come from a report of the Commission (probably a non-legislative document) which leaves Brussels total discretional power.
Among the hottest issues, according to Aegis, there is the shift of the burden of the proof. Until today (and also in the future, according to China’s accession protocol to the WTO) this was on Chinese producers while, according to the Commission, it will be on the EU industry which will have to prove the existence of market distortions based on a series of international criteria hard to prove.
“Today, it’s easy,” said Moreno Fioravanti, who represents EU bike producers. “The cost of a bike in China is half the cost of one made in Bangladesh. You just need to ask for a quote. It takes weeks. Tomorrow, finding data to prove state subsidies, communicating with third countries could take months or years,” he said. Let alone the anti-subsidy duties.
“It’s very difficult to prove that a country fully reimburses water, energy, and research costs to its companies,” said Andrea Ligabue (Ceramica).
“The European Parliament is fighting a tough battle, complaining that there were 15 years to think about it while the Commission awaited the deadline of China’s accession. We will work to prevent a weakening of the protection system.” “We neither want protectionism nor walls but a fair competition,” said Flavio Bregant, general manager of Federacciai.”
Italy Europe 24