10/16/2009
NEWS BRIEFS
EFDA: Steel Subsidies “Real Problem” on Chinese Fastener Imports

“Actual dumping we are against,” European Fastener Distributors Association president Geoff Hopwood declared. “We want a level playing field.”

Europe implemented an 85% tariff on Chinese exporters. Specific tariffs apply to some of the companies cooperated in the investigation. Those range from 0% for two subsidiaries of European companies, 26.5% for one Hong Kong registered company and between 63% and 77.5% for the remainder.

Hopwood suggested the real problem is in steel subsidies rather than fastener prices. Tariffs might have been based on 24% steel subsidies confirmed in a separate steel AD-case – yet steel is not 100% of the cost of a fastener.

EFDA leaders questioned whether antidumping tariffs applied by the European Union in February on fasteners imported from China reflected real trading prices.

EFDA chair Bernd Stapf told FIN the European Commission didn’t find any proof that Chinese factories were exporting products at lower prices than they were supplying their domestic market during the European investigation process.

“The dumping / duty calculation was based on a single small company in India which was not representative, in consequence the unrealistic high AD-rate did even surprise the complainants,” Stapf pointed out.

Indian prices usually reflect direct manufacturer to end user sales because there is not the same distribution infrastructure in India, he added.

The European Union does not recognize China as a market economy so it uses a comparative economy to calculate normal values to determine dumping.

The EC process doesn’t release the calculations for tariffs for concerned groups to respond to. “We weren’t even asked for comment.”

Participation in the process is expensive as attorneys and specialists have to follow step by step and explain real figures, which is expensive for trade organizations, Stapf explained.

“At the end of the day it was a political decision,” Stapf reflected. There are 27 member companies and the smallest country – Malta – gets the same one vote as the largest industrial producer – Germany. The anti-dumping tariffs past with a bare one-vote majority of 14 votes. Abstentions even count as “yes,” Stapf added.

The consequences of the European tariffs are not known yet, Stapf suggested. During the 15-month price investigation European distributors built up stocks and then the market collapsed and inventories have not been depleted so results are not obvious yet.

Hopwood remarked that the effect of U.S. anti-dumping tariffs on China and Taiwan would result in more production moving to other Asian countries.

When worldwide demand returns there is just not enough manufacturing capacity in the U.S. and Europe or in other Asian countries to replace Chinese and Taiwan production, Hopwood explained. ©2009 GlobalFastenerNews.com

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