The European Union appears to be removing anti-dumping duties on iron and steel fasteners from China rather than pay punitive retaliatory measures, Fastener + Fixing Magazine reported.
The European Commission is operating behind “sealed doors” in making changes, the European fastener magazine reported.
The World Trade Organization’s appellate body on Dispute DS397 published last month was more critical of the EU process of calculating anti-dumping duty levels based on an analogue country than previous rulings from the Dispute Settlement Body.
In the final stage in a seven-year dispute with China over the legitimacy of Regulation 91/2009, the WTO rules require the EU to bring its measures into compliance or face retaliatory measures from China. Those retaliations would likely to hit far more sensitive imports than fasteners.
Media statements from Chinese officials anticipate the EU will remove the anti-dumping duties, which were extended by five years following an Expiry Review last year (Regulation 519/2015). However, the latest statements suggest China has not received confirmation the EU will do this.
The next meeting of the WTO Dispute Settlement Body takes place February 26, 2016. China is expected to demand the right to apply tough retaliatory measures unless the EU has taken action.
The Commission has not made any information publicly available and does not appear to have initiated consultations with the key stakeholders in this issue. EU rules require approval for the repeal of trade defense measures from the member states via the Trade Defence Instruments Committee.
It is understood the Commission made a proposal for immediate repeal by the committee on February 17, but the final decision was postponed until this week. A simple majority of member states is required to approve a Commission’s proposal. Rejection requires a qualified majority, which means sixteen member states representing 65% of the EU population must vote against.
European fastener manufacturers have expressed concern about the developments - as are many importers holding inventory likely to be devalued by re-entry of China to the EU market.
The European Industrial Fasteners Institute, representing fastener makers, has urged members to energetically lobby against repeal of the anti-dumping duties on the basis this would be extremely damaging to their businesses.
Member states face the dilemma that protecting their fastener manufacturing industry would bring Chinese retaliatory measures on other more sensitive industries.
Repeal of the measures would make it probable the EIFI lodges new anti-dumping, and possibly anti-subsidy, complaints against imports from China based on the threat of dumping and material injury recurring. There is a delay between termination of measures and the Commission agreeing to new investigations, but in this case it could well be sympathetic to manufacturers’ concerns and act much more quickly, F+F reported.
That scenario means a repeal would not represent an unqualified ‘green light’ for importers to recommence trade with Chinese factories. While provisional duties, albeit almost certainly at a lower level, might not be determined for the normal nine months, the danger to importers could well be exacerbated if the Commission determines the risk of injury as so great to warrant making provisions to back date the duties.
In response to a Fastener + Fixing Magazine request for an update, the EU Trade Commission responded that the commission “has carefully analyzed the Appellate Body’s findings from January and is now considering possible further steps to take.”
Source: Global Fastener News