The European Union put anti-dumping duties on Chinese-made candles and non-alloy steel products on Saturday, approving an earlier-flagged move as leaders at the G20 summit called for countries to avoid trade protectionism. With trade disputes between Brussels and Beijing on the rise, the move comes as Chinese officials meet their European counterparts at the Group of 20 advanced and emerging nations in Washington.
Import tariffs of up to 60 percent will be slapped on Chinese candles which accounted for 300 million euros ($380.6 million) of the EU market, worth 810 million euros in 2007. Extra duties of up to 50 percent will also be placed on non-alloy steel wire products from the Asian powerhouse for the next six months, the EU's Official Journal said.
The decision comes as G20 leaders discuss a draft communique which asks countries to resist rising protectionist pressures in response to the global economic downturn and focus on reviving stalled world trade talks aimed at reducing trade barriers.
Since taking over her post from Peter Mandelson last month, the EU's trade chief Catherine Ashton has also repeatedly called for countries to avoid a repeat of the upsurge in protectionism which followed the Great Depression. But a spokesman for Ashton said the European Commission, which oversees trade policy in the 27-nation bloc, "is obliged to act when anti-dumping investigations show instances of unfair trade".
PRODUCERS HURT According to the Official Journal, Chinese candles and non-alloy steel wire rods were being "dumped" in the EU - exported at a price less than the price charged in its home market or below the costs of production.
Brussels launched its probe after complaints from European producers who said they were being hurt by Chinese exporters getting an unfair edge because of export aid, cheap raw material and illegal pricing which has led to a trade deficit with China which ballooned to 160 billion euros in 2007. China routinely denies it breaks trade rules and says Europe resorts to protectionism against its low-cost advantage.
The decision to impose duties on candles has also angered major European retailers and churches ahead of the highly lucrative Christmas period. The British Retail Consortium, representing companies such as Tesco ASDA [ASDAP.UL] and John Lewis [JLP.UL], described Saturday's move as "worrying". "The EU must show some sensitivity and understanding of the impact of the global recession on hard-pressed customers before Christmas," Alisdair Gray, BRC Director, said.
But Ashton's spokesman dismissed the move's impact on Christmas revenues. "Fortunately, in the case of candles, all indications are that the Christmas trade will not be affected due to the early ordering of stock before the duties come into play," spokesman Peter Power said. Following the completion of Brussels' full investigation, EU member states must vote in six months time on whether to impose so-called "definitive" duties lasting five years.