Sun, May 15, 2011 - Page 11 News List

China gets first EU anti-subsidy duties

Reuters, BRUSSELS

The EU yesterday imposed a five-year hike in duties on imports of glossy paper from China, the first EU challenge to Chinese state subsidies and a sign of more to come.

In a double swipe likely to anger China, the bloc said it would charge duties worth a maximum of 12 percent to combat what it says is illegal Chinese state aid that is hurting EU producers, as well as duties of up to 35.1 percent to counteract what it says is illegal pricing by Chinese exporters.

Both levels were approved by EU capitals in March.

Although the sector is small — Europe imported only about 130 million euros (US$183.5 million) of Chinese coated fine paper in 2009 for brochures and coffee-table books — this challenge has been seen as the start of a trend, particularly since the EU has vowed to take on Chinese state subsidies that put European producers at an unfair disadvantage.

“This is the first time ever we have put in place measures against the strategic and targeted subsidization of a specific industry by the Chinese government,” EU Commission spokesman John Clancy said.

He added that China was -flouting its obligations under international trade rules.

China may challenge the EU’s anti-dumping and anti-subsidy duties at the WTO. Beijing scored an important victory there in March, when the WTO ruled that the US had broken international trade law when it applied dual duties to certain Chinese goods.

Indonesian paper giant Asia Pulp & Paper, which exports paper to Europe from China through two subsidiaries, has been hit by combined duty of 20 percent. It rejected the EU move as factually flawed and said it would explore legal options.

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