China Takes Umbrage to EU Anti-Dumping Frenzy

This is one of those stories that requires little to no explanation on my part. Sour economic times pretty much across the globe have, shall we say, engendered lukewarm attitudes towards trade. Nowhere is this more evident than in the still-recessionary lands of Europa. At the moment, the EC is engaged in an anti-dumping frenzy against Chinese products. In simple terms, anti-dumping measures involve applying duties to imported goods allegedly sold for less than they would be at home. Hence, duties are applied so their prices in export markets more closely resemble those in domestic ones--or at least that's how it's explained. In recent times, China has understandably been the target of the most anti-dumping actions (member countries are obliged to inform the WTO of such measures).

Sufficiently annoyed with what his bosses perceive as Europrotectionism, the Chinese ambassador to the EU, Song Zhe, has taken this issue to the burghers of Brussels. From our favorite official news agency, Xinhua:

The European Union (EU) should restrain its use of anti-dumping measures against imports from China, the Chinese ambassador to the EU urged on Tuesday, calling for more dialogue and cooperation..."We saw reemergence of anti-dumping cases against China recently. An increasing number of Chinese enterprises received unfair treatment. We are very concerned about this," Song Zhe told the International Trade Committee of the European Parliament, which is newly formed after June elections...

Faced with the worst economic crisis in decades, the EU has launched a series of anti-dumping actions against China this year, covering a wide range of Chinese products. As from late July, the 27-nation bloc took five separate decisions in just three weeks. Such a frequent use of anti-dumping probes and punitive duties has been unprecedented. The EU's unusual move leads to concern, especially when the world economy is in recession due to the financial crisis.

"We hope the EU will prevent this uncontrolled development of anti-dumping. We also hope to strengthen dialogue and refrain from arbitrary use of anti-dumping measures for the sake of further cooperation opportunities," Song said...Currently, China and the EU are one of the most important trade partners to each other. Bilateral trade volume reached 425.6 billion U.S. dollars in 2008 from 2.4 billion dollars in 1975, an increase of 176 times, according to Song...

However, Song acknowledged the China-EU trade and investment have no escape from the current global financial crisis. "In the first seven months, bilateral trade volume fell by 20.7 percent and the EU investment in China fell by 4.8 percent. China-EU trade and economic relations are facing [a] severe test," he said.

And here is Ambassador Song trying to brush away concerns about the similarly enormous EU-China trade imbalance. As is the habit of the Chinese, they wash their hands of the matter thusly:

Challenged by an EU lawmaker on the EU's trade deficit with China, which is a major concern for the 27-nation bloc, Song said it has been caused by various reasons and China is working on that.

"The trade imbalance is caused by many reasons, including the international industrial transfer and thus the relocation of trade [offshoring, right?]. China's trade policy is not the cause," he said. "Nevertheless, in recent years, the Chinese government adopted a series of measures to encourage more imports, such as import promotion activities, greater facilitation of imports, sending purchasing groups and so on."

With a modest EU recovery in sight, expect a letup in the torrid pace of anti-dumping measures against China. Ultimately, I believe that more aggressive actions on the trade front against China, if initiated, will emanate from Washington, not Brussels.