Member state divisions delay EU trade reforms

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Plans to reform the EU’s trade defence mechanisms have been shelved until further notice due to deep divisions among member states over how to deal with cheap imports from countries such as China, EU Trade Commissioner Peter Mandelson has announced.

The proposals, which were already due in 2007, were supposed to adapt existing mechanisms for protecting European producers against unfairly traded and subsidised imports from third countries (EURACTIV 8/12/06). But the debate on what the new rules should look like has pitted free marketeers, such as Britain, the Netherlands and Sweden, against manufacturing nations such as Italy, France, Spain and Poland. 

The latter claim that imports of under-priced Asian goods are putting their industries at risk and threatening thousands of jobs, and have led calls for imposing anti-dumping measures and other safeguards in the past two years. 

They fear that the reform could be used as an excuse to water down the EU’s trade defence policy in order to better serve the interests of companies producing or sourcing goods in countries with cheap labour costs, such as China. 

The divergences on the issue were highlighted in a recent case regarding energy-efficient light bulbs originating in China (EURACTIV 30/08/07). At the time, Germany’s national light-bulb manufacturer Osram, which produces most of its light-bulbs in Europe, succeeded in convincing the Commission to extend anti-dumping duties on below-cost Chinese imports for an extra year, rather than scrapping them immediately, in order to allow European companies to adjust to changing market conditions. 

The move was strongly condemned by Dutch electronics group Philips and Swedish retailer Ikea, which both import of large quantities of power-saving bulbs from China. 

Speaking to Reuters, Trade Commissioner Peter Mandelson said: “There is no consensus at present […] I cannot force people to agree and at the same time I don’t want to bring forward proposals prematurely that would exacerbate differences among member states.” 

He did not say he was abandoning the reform plans but that he had chosen not to include them in a six-month work programme for the Slovenian presidency of the EU. 

He further warned that “the problems of taking decisions in some trade defense cases will continue to arise in the absence of reform”, pointing in particular to a looming dispute that will affect Europe’s steel industry. 

Indeed, while European steelmakers are upping the pressure on the Commission to impose punitive duties on imports from China, South Korea and Taiwan, which they say are being dumped on the market at below cost price, importers say such duties would adversely affect some seven million metalworkers and mechanical engineers in Europe who rely on cheap imports to remain competitive (EURACTIV 30/10/07). 

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