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October 13, 2009

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China asks WTO to rule on EU charges

CHINA yesterday said it will ask the World Trade Organization to examine whether European Union charges on imports of Chinese steel fasteners comply with international commerce rules.
China argues that the EU is illegally taxing the screws needed for products from furniture to cars. The action unfairly penalizes the commercial interests of more than 1,700 Chinese fastener producers, the Chinese government says.
The 27-nation EU accuses Chinese manufacturers of breaking trade rules by selling screws at 30 percent to 50 percent below European prices, but China's exporters contend that their screws are weaker and less expensive than those made in Europe.
The dispute between the two trade powers is highly sensitive. China said negotiations with the EU last month in Geneva failed to resolve the disagreement.
China will ask that an investigative panel be set up when the WTO's dispute body meets next week, it said in a statement.
"The Chinese government (is) opposed firmly to ... any promotion of trade protectionism," it said.
In January, the EU slapped Chinese exporters with trade charges ranging between 26.5 percent and 85 percent for five years, arguing that selling below cost by Chinese companies prevented European producers from gaining extra market share as sales boomed in recent years.
Brussels claims the antidumping charges on the fasteners were imposed in January in full compliance with WTO rules and with clear evidence of Chinese "wrongdoing."
Chinese screw makers complained in February that the EU's actions would hurt consumers without helping European producers.
Manufacturers from Jiaxing City in Zhejiang Province in eastern China - representing a quarter of Chinese screw exports - say they are unfairly being singled out because they charge the same as Taiwan producers and more than rivals based in Malaysia, Vietnam and India.
Brussels can delay the establishment of a WTO panel only once, meaning a formal investigation could be pushed back until November.


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