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Steel fastener makers hope EU sales can recover

By Bao Chang (China Daily)
Updated: 2010-12-07 11:02

BEIJING - Chinese manufacturers and exporters have welcomed a World Trade Organization (WTO) ruling handing China a victory in a trade dispute with the European Union (EU) over Chinese-made steel fasteners, and they expect their EU exports to rebound.

However, they said, they will no longer rely solely on the EU market and have developed global business profiles in the two years that the EU anti-dumping tariff on Chinese-made fasteners was in force.

The WTO ruled that the EU policy imposing a 63 to 87 percent tariff on the products discriminates against Chinese exporters, according to a statement on its website on Dec 3.

The decision comes a year and a half after China appealed to the trade body, after the EU placed a five-year anti-dumping duty on Chinese steel fasteners worth 575 million euros ($765 million) in 2007.

This is the first time China has won a case against the EU.

"It's good news, and our European clients have contacted us to discuss our re-emergence in the European market after hearing about the World Trade Organization's decision," said Ji Aiqun, export manager of Ningbo Jinding Fastening Piece Co Ltd.

"But the EU market is no longer our sole choice. We have entered other foreign markets, including the United States and Canada, which have yielded reasonable profits," Ji added.

The company in Ningbo, Zhejiang province, one of China's largest fastener exporters, suffered nearly devastating losses in 2008, when the EU, then its sole source of foreign orders, hit it with a 67.3 percent anti-dumping duty.

Ji said expansion in other markets saved the company from going under and that its key foreign strategy in the future will entail developing in various markets.

Wang Feng, business manager of Jiashan Yujin Fastening Co Ltd, said it will take a long time for the company to regain its European customers, who stopped importing the fasteners two years ago because of the high tariff.

According to Wang, more than 60 percent of his company's orders came from the European market before the tariff.

"Our company is still looking forward to reviving our business in the EU as part of our efforts to develop a global market portfolio," Wang said.

Widely used in railways, bridges and the wind power industry, the fasteners saw a global demand worth $53.6 billion in 2009.

Demand for steel fasteners will rise by 8.5 percent annually to reach $80.5 billion by 2014, according to Freedonia Group, an international market research company.

"Despite contravening WTO regulations, the EU and US tend to protect their domestic firms in international trade because of the unemployment problem and economic downturn," said He Weiwen, a council member of the China Society for American Economic Study.

Since November, the EU has adopted anti-dumping measures against many Chinese products, including coated paper, melamine and some glucose acids.

He said that WTO litigation is an effective way for Chinese companies to demand fair treatment

"To maintain a sustainable development, Chinese companies should also avoid over-reliance on one region when expanding business overseas."

The Ministry of Commerce welcomed the WTO's decision and asked the EU to treat Chinese companies fairly, in keeping with trade law and without discrimination, to maintain normal trade relations.

China Daily