EU Reflection: Who Has Hurt Anti-Dumping?

After 9 months of silence, the EU began to lift anti-dumping duties on Chinese products again in early September. On September 4th and 5, the European Union launched anti-dumping investigations on citric acid and monosodium glutamate produced in China. After 15 months of review, the European Commission recommended that the anti-dumping duties on Chinese energy saving lamps be levied for another 1 years.

At the same time, a strong "introspection" voice has also been heard from the European Union: EU Trade Commissioner Mandelson has publicly stated that although trade punitive measures such as levying anti-dumping duties are often reasonable and correct, if anti-dumping measures restrict EU companies' pursuit of reasonable profit, or ignore the EU's energy conservation policies and European production reality in the case of China's energy-saving lamps, they will backfire.

In fact, at present, the EU is demonstrating "reflection" on trade policy. In December 2006, the EU Trade Commission issued a "green paper" to solicit public opinions, and launched the first large-scale evaluation and discussion of trade measures including anti-dumping in the past 10 years.

The results of the "green paper" will be announced in the near future, and the European Commission will review trade measures such as anti-dumping.

In recent years, China's products suffer from the European Union's trade survey. We can see the obvious ups and downs: in 2005 and 2006, the EU launched 9 or 12 trade relief investigations against China respectively. But in 2007, the EU's trade remedy survey appeared a rare silence.

"The EU's internal interest groups have been playing a fierce game, showing calm, and the sudden increase in trade relief is just an external manifestation of this game," said Wu Zhenchang, chairman of Panyu Chuangxin Shoes Co., Ltd.

In the EU anti-dumping investigation on Chinese shoe products, Wu Zhenchang has launched the "EU anti-dumping response Alliance for Chinese shoes products", representing China shoe enterprises and the European Commission "several rounds of war".

Last October 4th, the EU finally decided to impose a 16.5% anti-dumping duty on Chinese leather shoes, and the time limit was shortened to five years from the previous two years.

The double-edged sword effect shows that the game will continue. This year, a series of data changes once again aroused the concern of EU manufacturers: since the introduction of anti-dumping duty, the number of leather shoes exported to Macao has increased significantly.

Recently, the European Commission announced the launch of an anti circumvention investigation of Chinese leather shoes.

The so-called "circumvention" refers to the fact that when a country's goods are subject to anti-dumping duties by another country, producers can reduce or avoid levying anti-dumping duties by means of "detour".

Because of the easy obtaining of evidence, the anti - evasion investigation is often less lethal than the anti-dumping investigation.

"Whether it is anti dumping or anti circumvention, the fact that the European Union has to face is that many large enterprises in Europe have moved their production lines to China, Southeast Asian countries or global sourcing, and the trade remedy policies confined to protecting local industries will hurt the interests of European enterprises."

Wu Zhenchang said.

After publishing the green paper, the European Union held special seminars in Beijing to listen to the views of Chinese enterprises.

Guo Weiwen, a representative of the shoe company in the South China Sea, once attended the seminar and spoke on behalf of the shoe industry alliance.

Guo Weiwen believes that the EU anti-dumping case against Chinese shoe products is a typical case, and the focus of controversy among all stakeholders is whether the EU's trade protection policy should protect industries that are already lagging behind, or whether it should protect the overall interests of the EU.

Wu Zhenchang said that the EU's green paper is a reflection of its trade protection policy, apparently because it has noticed the fact that even if the anti dumping stick is repeatedly waved, it will only force the already globalized European enterprises to move from one production base to another, increasing costs and reducing profits.

From this point of view, the EU will comply with the overall situation of globalization and adjust its trade protection policy. "But this adjustment will not be implemented in one step, because the game between different interests will continue."

The policy of "negligible the rest" is questionable. As with shoe cases, more and more trade protection cases have made European Commission officials in a dilemma.

In 2001, the EU began a 5 year anti-dumping duty on China's energy-saving lamps.

When the measure expired in July 2006, the European Union launched a 15 month investigation. The original anti-dumping measures were still applied during the investigation.

Recently, the European Commission recommended that a 1 year anti-dumping duty on China's energy-saving bulbs be automatically cancelled after the expiration.

Jia Qiang, general manager of Xiamen Donglin Electronics Co., believes that if this proposal is adopted, it will not only hurt the interests of Chinese producers, but also make some European manufacturers suffer a lot, because most of the EU manufacturers of lamps, including PHILPS Holland, have pferred most of their production to China. The anti-dumping duties imposed by the EU have made these enterprises more competitive and more competitive.

In addition, some environmentalists criticize that the EU's trade policy is also out of place in the "just a little bit, regardless of the rest", while maintaining the interests of backward producers, but ignoring the EU's goal of reducing greenhouse gas emissions and reducing energy consumption.

Foreign trade experts pointed out that with the increasing number of EU enterprises pferring their production to China's relatively cheap third tier countries to maintain competitiveness, the concept of "EU enterprises" has been difficult to define. Intensive anti-dumping measures protect European related industries and enterprises while hurting European enterprises investing in countries and regions such as China.

The EU needs to reflect on how to adopt trade remedy measures to meet the interests of EU enterprises and consumers, so as to find a relative balance between various interests and distinguish unfair trade practices from the rational division of labor in the supply chain under globalization.