EU considers trade changes with an eye on China

The European Union could reshape anti-dumping rules aimed at China and other exporters, leading to broader WTO complaints over subsidies, an EU official said, stressing that any changes hinged on negotiations.

The European Union has been seeking views since December on how Brussels may recast the arsenal of protective rules it has invoked to fend off surges of garments, leather shoes and many other goods.

The first stage of consultation ends today, and European Commission director of "trade defence instruments", Fritz-Harald Wenig, said Brussels faced the tricky task of balancing producer groups anxious to protect home industries against importers and consumer groups demanding relaxed barriers.

"The task will be now to find a consensus in this area. This will be very difficult," he told Reuters in an interview.

Europe is often sharply divided on trade disputes, pitting pro-free trade countries against others, mostly in Southern Europe, that want greater protection against imports from Asia.

Mr Wenig stressed that any changes first needed close consultation with EU members, industry groups and consumers.

But in Beijing to talk about the possible reforms with Chinese officials yesterday, he spelled out several areas where trade officials could propose changes for EU states to vote on.

The review will probably prompt proposals to make anti-dumping procedures more transparent, including issuing information about meetings with member states and giving "clearer indications of what measures may be proposed", he said.

Brussels could also lift the proportion of companies in an industry needed to take an anti-dumping demand forward, he said. Rules now stipulate that 25 per cent of companies must back an action - a relatively low level for some smaller sectors.

"It will not be easy to raise this, but I would not exclude it. I would really not exclude it, because 25 per cent is indeed relatively low," Mr Wenig said.

He also raised the possibility of Europe shifting its stance on anti-subsidy cases against China and other "non-market" economies at the World Trade Organisation.

Washington sought consultations at the WTO in February about what it says are illegal Chinese subsidies for steel, computers, clothing and other industries. It is targeting Chinese export subsidy programmes, which potentially cover up to 60 percent of China's exports, and three other programmes that subsidise purchases of domestic goods.

Currently, Brussels generally does not aim anti-state subsidy complaints against "non-market economies" such as China, because such distortions are thought too widespread in such economies to justify specific action. Instead, anti-dumping rules are invoked.

Brussels had no active plans to change this approach but was watching the US complaint and could consider a shift, Mr Wenig said.