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China resists EU steel tariffs

(Global Times)    10:03, November 14, 2016

China expressed great concerns over the European Union's protectionist measures against Chinese steel products on Saturday, a sign of growing impatience with EU disputes on trade measures and China's market economy status at the WTO, experts said.

The Ministry of Commerce (MOFCOM) on Saturday said China has expressed great concern and worries over the protectionist tendency the EU has showed in the steel sector.

"The EU has ignored Chinese companies' positive cooperation and pleas, and continues to use the unfair, unreasonable 'surrogate country' [price and cost reference mechanism] to impose higher tariffs [on Chinese products] and seriously harm Chinese companies' interests," the ministry said in a statement releasing on its official website on Saturday.

MOFCOM urged the EU to strictly follow relevant World Trade Organization rules, avoid abusing remedy measures and protect the rights of Chinese companies.

The statement came on the heels of a decision from the European Commission (EC), the governing body of the EU on Saturday, announcing temporary anti-dumping measures against seamless steel products from China for six months.

This is the latest move the EU has taken against Chinese steel products, amid growing disputes between the world's two largest steel producers which stretch back to 2006, when the global market suffered from a supply glut, according to Wang Guoqing, research director at the Beijing Lange Steel Information Research Center.

Wang noted that about a dozen disputes between China and the EU over steel have happened since 2006.

"Steel industries in the EU feel that steel imports from China have hurt their businesses and they claim that China is dumping its steel capacity at a price much lower than the market prices. But it is wrong and unfair for them to blame China for their own problems," Wang told the Global Times on Sunday.

She pointed out that the EU's claim is based on the "surrogate country" mechanism, under which the price and costs of Chinese steel products are compared to a third-party country.

"That is unfair because Chinese companies can control cost and price much more effectively than foreign ones because of the scale and progress the industry have achieved, not because they receive subsidies from the government," Wang said.

Stronger tone

Experts noted that China has stepped up its opposition against the EU's moves to challenge China not only in the steel industry but on the larger issue of whether the latter is trying to deny China "market economy status" at the WTO and keep the "surrogate country" mechanism.

On Friday, both MOFCOM and the Ministry of Foreign Affairs voiced strong opposition to a proposal from the EC to scrap a list of "non-market economies," but leave open the option to use the "surrogate country" mechanism in future anti-dumping cases if "market distortion" was found in a third country.

The two ministries pointed out that the EU's proposal is trying to keep the "surrogate country" mechanism in place with a new regime but not eliminate it at the basics. They urged the EU to execute its obligations under the Article 15 of China's accession to the WTO and eliminate the mechanism.

"I must stress that China will also maintain its right to take all necessary measures to firmly protect its legal interests," Shen Danyang, a spokesperson for MOFCOM told a briefing on Friday.

Concrete actions

Experts also said the EU's "unfair" protectionist measures against Chinese products have caused "great" loss for companies and both the government and companies should focus on taking actions to protect their interests.

Not just words, but necessary concrete actions should be carried out if the EU and others continue to treat China unfairly, according to He Weiwen, an executive council member at the China Society for the WTO.

"Addressing the issue through dialogues would be ideal, but if that doesn't work, we must take actions to firmly defend out rights and interests," He told the Global Times on Sunday.

"They must understand that China has and will strictly comply with WTO rules, and they also must understand China will variously defend itself," He said.

One action China could take is to start a complaint with the WTO for unfair treatment toward Chinese companies, according to He. "This might take some time, but it is the most reasonable one and there is a high possibility the WTO will rule for China if we provide sufficient evidence."

Other actions include imposing "some kind of restrictions" on imports from the EU and "temporarily halting" some trade investment cooperation projects with the EU, experts also noted without further elaborating. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Ma Danning, Bianji)

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