UPDATE 2-EU body approves import duties on Chinese screws
[2008-12-23 17:04:00]
BRUSSELS, Dec 3 (Reuters) - A European Union anti-dumping committee voted on Wednesday to adopt import duties of up to 87 percent on screws and bolts from China, EU diplomats said, in a move likely to worsen fragile ties between Brussels and Beijing.
A last-ditch effort by China to avoid the duties by imposing stricter pricing failed, one diplomat said.
The vote must be approved by the 27-country bloc's trade ministers within a month before the duties can come into force.
China pulled out of a long-planned summit with the EU on Monday over a meeting between French President Nicolas Sarkozy -- who holds the rotating EU presidency -- and the Dalai Lama, whom Beijing reviles for demanding self-determination for Tibet.
Trade disputes between Brussels and Beijing are on the rise since the EU's trade deficit with China ballooned, hitting 160 billion euros ($202 billion) last year.
EU trade experts say Chinese exporters get an unfair edge because of suspected subsidies in China's steel industry that give them cheap raw materials.
Under the Chinese plan proposed ahead of Wednesday's vote, the majority of exporters would have observed a pricing level agreed with the European Commission, which oversees trade on behalf of the 27-nation bloc.
The tariffs would cover up to 200 Chinese companies exporting components widely used for cars, white goods or machinery in the EU and worth some 575 million euros per year.
Feng Jinyao, head of the China Industrial Fastener Association, said the group had asked Beijing to appeal against any duties at the World Trade Organisation -- the global trade watchdog, but he hoped for a solution with Brussels.
PRICE CONTROLS
"We still hope to sit down and talk over a solution, for instance through us agreeing to a volume restriction or price controls," he said.
But a diplomat said the Commission was unlikely to reach such a compromise.
"The evidence is overwhelming from the Commission's point of view, so I reckon a deal is now off the table," the diplomat said.
Chinese producers are particularly unhappy that two Chinese units of two European companies party to the complaints to Brussels' trade officials will be exempt from the duties.
The Jiaxing Association of Iron and Steel Fastener Companies, representing some 20 percent of fastener exports, said it was annoyed that Italy's Agrati and Celo of Spain had secured exemption from the duties for their Chinese units.
"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," a Jiaxing spokesman said. (Editing by Dale Hudson)
