6
Strongly divided reactions to
dramatic antidumping proposal
European fastener importers and many of their customers are expressing deep shock at news that
the European Commission has proposed the imposition of antidumping duties of up to 87.3% on a
wide range of fasteners imported from the People’s Republic of China. For some European
manufacturers, though, the application of duties could represent a vital lifeline as order books dry
up and trading conditions get bleaker by the day. One Italian producer commented, “orders coming
back from Asia right now would be like a fresh air in such desperate times”.
The application is not, at this stage, by any means certain. The Commission’s 45-page proposal
document was issued to member states in the first week of November in preparation for a meeting of the
EU Antidumping Committee scheduled for 25 November. The committee comprises representatives from
the trade ministries of all EU member states. A majority decision will determine whether the Commission’s
proposal is confirmed by the Council of Ministers, following which a Council Regulation, translated to all 23
official EU languages, would be published in the EU Official Journal. Usually tariffs are effective immediately
from this date of publication. The deadline for announcement of a definitive decision in the AD525 case is
8 February 2009, although there is nothing to prevent earlier publication of the decision. Some member
states are known to be minded to oppose the Commission’s proposal, presumably influenced by some
political leaders strictures against protectionism at the recent G20 conference.
The proposal was also sent to ‘interested parties’ registered with the investigation, including fastener
trade associations across Europe and representatives of Chinese fastener manufacturer associations. Despite
disclosure restrictions the proposal document is in widespread circulation throughout European and Asian
fastener industries.
Association members have benefited from briefings on the proposals and their potential implications.
General awareness across the European fastener industry, though, is mixed and there is clear evidence of
significant levels of misinterpretation.
Distributor associations, and other opponents of antidumping measures, have rapidly assembleds last
minute arguments and comments aimed particularly at influencing delegates to the critical Antidumping
Committee meeting.
Neither the EIFI, representing European manufacturers and responsible for presenting the antidumping
complaint originally, nor EFDA, representing European distributor associations, has yet issued a statement
regarding the Commission’s proposals.
The Jiaxing Association of Iron and Steel Fastener Companies, representing 20% of Chinese exports of
fasteners, expressed annoyance to Reuters that two Italian companies are likely to have secured exemption
from the duties for their Chinese businesses. Jiaxing’s legal representative in Brussels highlighted “the
question of the fairness of two European manufacturers asking for protection ... when their own Chinese
subsidiaries get total exemption from the duties through the back door."
The Commission has proposed a tariff level of 78% for around 100 Chinese factories that cooperated
with the investigation and a range of specific tariffs for a smaller number of companies that obtained
individual treatment. For most proposed tariffs range between 62 and 82%, but for two European financed
manufacturing ventures in China the proposed level is 0%.
General reactions from importers reflected horror at potential tariff levels far exceeding their worst
expectations. Many predict serious short-term disruption in supply to European industry, arguing that,
contrary to the Commission’s belief, most European manufacturers do not have the practical capacity or
willingness to meet demand for all of the products involved in the case.
Substantial cost increases are also predicted for fasteners across the board. Prices from alternative Asian
sources are already reported to be hardening as outstanding orders on Chinese factories are cancelled and
resourced.
One major UK wholesaler estimates that tariffs, if applied, would add to over 70% price inflation in the
last year driven by raw material increases and currency effects. In a highly charged letter to UK and
European politicians, a smaller UK importer is far more emotive in speaking of “fear for our survival as a
business”.
The provisions of the 1996 Antidumping Regulation
prevent this magazine from providing a detailed analysis
of the Commission’s proposal at this stage. As we are able
to bring more news it will be published in the News section
of www.fastenerfair.com and mailed to those registered
to receive our breaking news email alerts.
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