The European Commission has proposed a five-year import tariff worth up to 39.1 percent on imports of coated fine paper from China, according to a document obtained by Reuters.
The tariff, which needs the approval of European Union member states and must launch by May 17, aims to counteract what the EU executive says are illegal Chinese state subsidies and market dumping by Chinese exporters.
Combining for the first time anti-dumping and anti-subsidy duties against China, the duty plan is politically sensitive and expected to be discussed by representatives of EU member states later this month.
In itself a small case—Europe imported about 130 million euros of Chinese coated fine paper in 2009 for use in brochures and coffee-table books—the EU challenge has the potential to trigger similar moves in other sectors.
Other industries under pressure to compete with Chinese rivals are keen to challenge what EU policymakers have said is a rampant network of subsidy schemes in China.
China has denied it hands out illegal subsidies to industry. Last week, the World Trade Organization dealt China an important victory, ruling that the United States had broken trade law by penalising China twice with dual antidumping and anti-subsidy duties on certain Chinese goods.
But the Commission said in its document its dual-tariff plan would stand up to legal scrutiny and that a combination of the kind of Chinese subsidies challenged and EU trade laws meant it would not fall into a trap of imposing illegal double penalties on Chinese exporters.
“It was not considered necessary to further examine whether, and to what degree, the same subsidies are being offset twice when antidumping and countervailing duties are simultaneously imposed on the same product,” the Commission said in the document.
Commission officials were not immediately available for comment.
The Chinese operations of Indonesia’s Asia Pulp and Paper (APP) face a combined tariff of 20 percent—8 percent to counteract market dumping and 12 percent to counteract Chinese state subsidies—according to the document.
If approved by a majority of member states, the dual tariff could be in place until 2016.
Chinese glossy paper has been subject to a provisional antidumping duty of up to 39.1 percent since last November. (Reuters)