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Issue #588

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EU-Asia trade disputes lie behind free-trade talks

By: | at 08:00 PM | International Trade  

European Union leaders attending an EU-Asia summit next week will sign Europe’s first bilateral free-trade pact with South Korea and open trade talks with Malaysia.

But EU-Asia trade relations are also fraught with disputes, with the EU launching a series of dumping and subsidy cases against China and other Asian states in recent months.

Here are some of the trade disputes affecting the region.

Subsidies
The EU launched its first two challenges against Chinese state subsidies this year, starting investigations into state aid for wireless modems and glossy paper.

Trade specialists attribute the move to Europe preparing defences ahead of having to acknowledge China as a free market economy in 2016. Afterwards, it will be harder to challenge Chinese export pricing.

Custom Fraud
Armed with better statistics from customs authorities, the EU has been deploying its anti-fraud squad (known as OLAF) to track goods that avoid high EU import tariffs being shipped to Europe illegally via third countries.

Investigators tracking Chinese steel screws and bolts being smuggled to Europe via Malaysia have gathered enough evidence for the EU to start a formal investigation, EU diplomats say. Another fraud study concerns Singapore serving as an illegal transshipment port for U.S. biodiesel to avoid EU tariffs totalling more than 400 euros per tonne. Evidence of wrongdoing could prompt the EU to impose tariffs also on Singapore-made biodiesel.

Dongles
The EU launched its full arsenal of defensive trade measures against Chinese wireless modems, investigating claims by sole EU dongle producer Option of illegal Chinese state subsidies and illegal market dumping by Chinese exporters such as Huawei. It is also considering whether to impose safeguard limits on imports.

Glossy Paper
The EU started a dual investigation this year against Chinese glossy paper used for brochures and coffee table books, checking EU industry allegations of illegal Chinese state subsidies and market dumping by Chinese producers.

Fibreglass
Chinese-made fibreglass used in the production of lightweight wind turbines, cars and ship hulls is subject to a preliminary 43.6 percent tariff while the EU conducts an investigation into EU industry allegations of illegal Chinese market dumping.

Aluminium Wheels

EU governments have backed plans for five-year duties worth 22.3 percent on the one million car wheels that China exports to the EU annually, after the European Commission presented evidence of market dumping by Chinese producers. Ford and BMW, which source wheels from China, oppose the duties that will be launched later this year.

Seamless Stainless Pipes & Tubes
The EU is investigating claims of illegal export pricing of Chinese-made stainless pipes and tubes used for drilling for and transporting oil and gas, potentially leading to high tariffs. EU producers Tubacex and Salzgitter are also questioning the legality of exports from India and South Korea.

Origin Labels
Asian-made shoes, textiles, furniture, bricks and tiles could become subject to new EU rules that will require labels denoting the country of origin of these goods entering the EU. Aimed at harnessing EU consumer loyalty to locally-made goods, the label laws have critics across Asia’s exporting community. EU lawmakers last month called for the label rule to enter the EU rulebooks.

Plastic Bottles
Iran, Pakistan and the United Arab Emirates last month brought to 11 the number of countries whose plastics exporters now face extra EU tariffs, worth up to 139.70 euros per ton.

The EU already has tariffs in place against China, India, Indonesia, South Korea, Malaysia, Taiwan and Thailand to stem imports supplying Europe’s booming soft drinks market. (Reuters)