Frayed trade

A landmark WTO report has ended a long-running dispute between China and the EU with profound implications for Chinese exporters, writes Qian Wenjie

The World Trade Organization (WTO) on 18 January 2016 circulated the compliance Appellate Body report DS397 in the dispute entitled European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China. In the report, China won all the claims and arguments. In order to implement the rulings and recommendations of the WTO, the EU repealed the fastener anti-dumping measure against China on 27 February 2016, which terminated the seven-year trade dispute between the EU and China.

With respect to WTO jurisprudence, the fastener dispute has a significant impact on the EU’s trade practice, specifically in relation to: information disclosure; fair comparison; status of analogue country producer; calculation of dumping margin; and the definition of the domestic industry. Chinese exporting producers may rely upon the legal reasoning and interpretation given by the dispute settlement body (DSB) in the fastener case to protect their due rights in EU anti-dumping investigations.

Impact of the fastener dispute

On 26 January 2009, the EU imposed anti-dumping duties ranging from 26.5% to 85% on carbon iron fasteners imported from China. The measure sharply decreased the annual export value of fasteners from US$1.07 billion to US$80 million, and the market share of Chinese fasteners in the European market dropped from 26% to 0.5%.

Qian Wenjie is a partner in the Beijing office of Chance Bridge Partners. She used to work for the European Commission and was responsible for legal negotiation for EU-China co-operation programmes.