EU slaps first anti-subsidy duties on China
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The European Union (EU) slapped its first-ever anti-subsidy duties on imports from China Saturday, which analysts said was a bad precedent and legally flawed.
The anti-subsidy duties, ranging from 4 percent to 12 percent, were imposed on Chinese coated fine paper, which is used for high-quality printing such as brochures and magazines.
"This is the first time ever we put in place measures against the strategic and targeted subsidization of a specific industry by the Chinese government," said John Clancy, EU trade spokesman.
Apart from the anti-subsidy duties, the EU also hit Chinese fine paper producers with anti-dumping tariffs ranging from 8 percent to 35.1 percent, marking the first time that the world's largest trading bloc took dual trade defense measures against China.
The dual duties would last for the next five years and could be extended if the expiry leads to a recurrence of injury to the European paper industry, the European Commission said.
The EU launched an anti-dumping investigation into imports of Chinese coated fine paper in February 2010, followed by an anti-subsidy investigation two months later.
Concluding a 15-month probe, the EU said the Chinese government has been subsidizing its coated fine paper industry heavily by offering cheap loans, allocating land below market value and granting various tax incentives, which had a significant negative effect on the financial and operational performance of European rivals.
Hosuk Lee-Makiyama, co-director of the Brussels-based think-tank European Centre for International Political Economy (ECIPE), said the evidence used in the case was weak since the Chinese producers hold less than 4 percent of the EU market, even counting the volumes by EU firms which have invested in China, and therefore could hardly inflict any injury on European producers.
