By Juliane von Reppert-Bismarck
August 11, 2010 4:32 PM EDT
The World Trade Organization has condemned the way the European Union assesses duties on unfairly priced imports in a complaint brought by China over sales of screws and bolts, a person familiar with the case said on Tuesday.
The ruling, if confirmed, demolishes a key approach by Brussels in dealing with imports from countries it deems not to be market economies, such as China, Vietnam and Cuba.
And it marks a victory for China -- the main target of anti-dumping measures, or duties on imports judged to be sold for less than they cost at home -- in its first trade dispute against the European Union since joining the WTO in 2001.
"The panel has found that the EU discriminates against Chinese exporters compared to exporters from other countries," said the person familiar with the case.
"It's a big victory for China as it takes out one of the pillars of EU anti-dumping activity against China," he said.
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He was speaking after studying a confidential interim report by a panel of WTO experts on the complaint, raised by China in July last year, over anti-dumping duties on fasteners.
A spokeswoman for the European Commission in Brussels declined to comment as the ruling is still confidential.
MIXED RULING
The case involves duties of up to 85 percent, targeting hundreds of Chinese companies selling components widely used for cars, white goods and machinery worth some 575 million euros ($755 million) a year.
The WTO issued the report to Brussels and Beijing on Tuesday. Its final reports rarely differ from the interim versions.
The WTO panel ruled that that EU anti-dumping regulations break international trading law and are discriminatory.
In particular it rejected the EU's approach to non-market economies, which effectively applies a single anti-dumping duty to the whole country rather than for individual firms, unless they can prove that they are independent of the state.
It means that the EU must now set individual duties on companies that want them, without unnecessary obstacles, instead of imposing a blanket duty for the whole country.
But the mixed ruling did not back all of China's claims, for example dismissing Beijing's argument that Brussels made unfair comparisons between high-end EU fasteners used in the car and aviation industries with low-grade Chinese screws and bolts sold in hardware shops.
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