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China Scores Major Victory in Seven-year Trade Dispute with EU

| Jan 21, 2016 08:38 AM EST

The European Union's effort to impose tariffs on Chinese imports of screws, nuts and bolts suffered a blow as the World Trade Organization ruled in favor of China in the seven-year trade dispute.

The World Trade Organization (WTO) ruled in favor of Chinese fastener makers on Monday, Jan. 18, giving China a major victory in its seven-year dispute with the European Union (EU), China Daily reported.

The WTO said in its ruling that the EU decision to impose hefty tariffs on fastener imports from China during the past seven years is illegal.

As this developed, the Ministry of Commerce said that China, for its part, will take more decisive measures to protect the rights of its domestic exporters.

Chen Fuli, deputy director-general of the department of treaty and law at the ministry, said that China would file a trade retaliation request to the WTO to require the EU to remove the anti-dumping duties on Chinese fasteners if the EU does not negotiate terms or remove such an unfair duty after the ruling.

According to the report, it normally takes up to 15 months for countries to revise rules and withdraw anti-dumping duties after a WTO ruling on trade disputes.

China is the world's biggest producer of screws, nuts, bolts and washers, while the EU is a major destination for Chinese fasteners, which are used in products ranging from aircraft, high-speed trains and automotive parts to furniture.

At least $1 billion worth of fastener products from China were shipped to the EU in 2008, which fell to $80 million by 2014, after the EU imposed anti-dumping duties on 85 percent of China's fasteners for five years beginning Jan. 2009.

China brought the case--its first case against the EU--to the WTO's dispute settlement mechanism on July 31, 2009.

According to the National Development and Reform Commission, there are currently more than 8,000 fastener enterprises in China, including more than 6,000 private businesses, small and medium-sized companies. More than 200,000 people are employed in the industry and products worth $5.24 billion have been exported to global markets such as the United States, Russia, Japan, Germany and Brazil in 2014.

Gu Weiping, general manager of Jiaxing Xiongdi Fastener Co., said that the WTO ruling is definitely a major victory for China. "We will be closely watching on how it is implemented by the EU."

Gu said that the EU is "probably unwilling to do so, or may delay the implementation or sometimes only partially implement the WTO ruling" since the Netherlands, Spain, the Czech Republic and Italy, the major fastener exporters in the world, have the support of their respective industry associations, trade unions and local governments.

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