15 January 2008

Europe Delays Changing Rules on Cheap Goods

This article is excerpted from the 15 January 2008 edition of “The New York Times”.

The European Commission has shelved plans to change the trade rules that allow it to retaliate against countries that sell goods below their market value. The move illustrates deep divisions in Europe over how to deal with China’s booming exports.

Acknowledging that he has no chance of getting an agreement from the 27 countries in the European Union, the trade commissioner, Peter Mandelson, said Sunday that the proposals would be delayed.

The decision underlined the differences in European capitals over how to deal with the surge of Chinese exports and the job losses caused by the outsourcing of production by European countries to Asia.

The commission’s retreat was seen as a victory for countries including France and Italy, which have sought to give European industry greater protection against Chinese imports….

Mr. Mandelson said there was still a need to clarify existing rules. Lack of clarity on what factors influence decisions on antidumping cases has been underlined by feuds over imports of Chinese-made shoes and low-energy light bulbs.

The issue in the case involving shoes was a “community interest test,” which tries to balance the interest of employment in Europe against the advantage to retailers and consumers of cheap imports….

Mr. Mandelson argued that the trade rules were so unclear that companies could not make commercial decisions with legal certainty.

Other, less fraught proposals were also shelved, including measures that would give trade lawyers greater access to documents and provide more assistance to smaller firms seeking to use the trade defense system.

But many countries feared that any changes drafted by Mr. Mandelson would reduce the opportunity to retaliate against dumped goods.

Mr. Mandelson’s office rejected that claim, saying that he wanted to clarify an opaque decision-making procedure….