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UPDATE 1-EU eyes duties on China screws, fasteners-document

Published 11/05/2008, 11:26 AM
Updated 11/05/2008, 11:30 AM
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(Recasts with details, background, changes source)

By Darren Ennis

BRUSSELS, Nov 5 (Reuters) - The European Union's new trade chief is to propose anti-dumping duties on Chinese-made screws and steel fasteners in a move likely to anger Beijing, an EU document obtained by Reuters on Wednesday showed.

EU Trade Commissioner Catherine Ashton will propose tariffs of between 63 and 87 percent over the next five years at a meeting of trade ministers from the 27-member bloc this month.

The decision covers up to 200 Chinese companies exporting components widely used for cars, white goods or machinery in the EU and worth some 575 million euros ($740 million) per year.

But notably two Chinese units of two European companies that were party to the complaints to Brussels' trade officials will be exempt from the duties, the Commission document showed, much to the anger of Chinese exporters.

Jiaxing Association of Iron and Steel Fastener Companies, which represents some 20 percent of exports of fasteners, is annoyed that Italy's Agrati and Celo of Spain have secured complete exemption from the duties for their Chinese units.

"No matter how hard we look at the European Commission's analysis, we can't see how Chinese exports of fasteners have hurt European manufacturers in any way," Dr Robert MacLean, a trade partner at the law firm of Crowell & Moring in Brussels who represents Jiaxing told Reuters.

"There is also the question of the fairness of two European manufacturers asking for protection ... when their own Chinese subsidiaries get total exemption from the duties through the back door."

EU trade experts say Chinese exporters get an unfair edge because of suspected subsidies in China's steel industry that gives them cheap raw material.

Trade disputes between Brussels and Beijing are on the rise since the EU's trade deficit with China has ballooned, hitting 160 billion euros ($249 billion) last year.

Since replacing Peter Mandelson earlier this month, Ashton has warned countries grappling with the global economic slump against protectionist measures similar to those taken in the aftermath of the Great Depression during the 1930s.

(Reporting by Darren Ennis; Editing by Mark John and Erica Billingham)

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