The European Commission is locked in a dispute over whether to impose punitive tariffs on cheap Chinese imports to the EU, with the issue expected to heat up a Wednesday regular meeting of 27 EU commissioners.

Commissioners from three leading EU states - Germany, France and Italy - have lined up in efforts to overrule a decision by their UK colleague in charge of trade, Peter Mandelson, not to recommend anti-dumping duties on air compressors from China, according to the Financial Times.

A commission study, cited by the UK business daily, has shown that air compressors are being dumped at below cost price.

The opposition is also fuelled by Italian producers, Nu Air and Fiac, claiming they will shift their entire production to China if duties are not imposed, a move estimated to cost 500 jobs in Europe.

"The European Commission is refusing to give us the chance to create hundreds of jobs in Europe because they claim the process of delocalisation of production is irreversible," the chief of Nu Air Italy, Roberto Balma, was cited as saying by the FT.

He added: "But we have done the maths - delocalisation is reversible. All we ask is for the European Commission to give us the chance to prove it."

However, commissioner Mandelson has said such tariffs could prove counter-productive.

Anti-dumping duties can be imposed by the commission to protect European firms from foreign competitors dumping goods on the EU market at below cost price. Critics point out, however, that tariffs slapped by Brussels on products from non-European countries are increasingly hitting EU firms that have shifted production abroad.

A commission study, cited by the FT, has shown the duties would cost €30 million a year, compared with an estimated benefit of about €7 million to the Italian producers.

'Made in China' production already accounts for 50 percent of the EU's air compressor market, while the Italian manufacturers represent only eight percent, the FT reports.

The same divisions were highlighted last year when the commission extended the bloc's import duties on environmentally friendly light-bulbs made in China. In 2006, the EU's shoe-producing countries won a two-year anti-dumping regime against imports of Asian footwear.

Recently, European steel firms have also demanded that Brussels impose import duties on Chinese steel.

In general, Europe's imports from China have been growing rapidly over the past years, while the country is at the same time the Union's fastest growing export market.

The EU imported €191 billion of goods from China in 2006, while imports accounted for €63 billion, according to Thomson Financial News. Europe's trade deficit with Beijing is expected to reach €170 billion for 2007.

26.02.2008 - 09:26 CET | By Renata Goldirova

Source: euobserver.com