Chinese exporters expressed their deep regret on Sunday at a European Commission's decision to propose anti-dumping duties up to 87 percent on Chinese-made screws and bolts.

Fasteners exhibited at a steel products show in Shanghai. Chinese exporters expressed their deep regret at a European Commission's decision to propose anti-dumping duties up to 87 percent on Chinese-made screws and bolts. [Asianewsphoto]

"The decision is fundamentally flawed because the European Commission's own analysis indicates that European manufacturers of these products have not suffered any damage as a result of increased imports of screws and bolts from China," the Jiaxing Association of Fastener Import and Export Companies, a Chinese exporters lobby, said in a statement released in Brussels.

The association said according to the Commission's analysis, the profitability of the European manufacturers increased 110 percent in the period between 2003 and 2007. Similar improved trends were shown for the European manufacturers' production levels, sales volumes and value as well as return on investment. Even employment in the European industry increased by 12 percent.

"No matter how hard we look at the European Commission's analysis, we can not see how Chinese exports of fasteners have hurt European manufacturers in any way," said Zhang Feng, deputy secretary of the association. "They are making better profits than Chinese companies."

The newly-appointed European Union (EU) Trade Commissioner Catherine Ashton is due to propose anti-dumping duties on Chinese fasteners of between 63 and 87 percent over the next five years at a meeting of trade ministers from the 27-nation bloc later this month.

The decision will cover up to 200 sorts of Chinese-made fasteners widely used for cars, large household appliances and machinery in the EU.

Total exports of these products from China in 2007 were around 575 million euros ($736 million), making the investigation one of the largest ever conducted by the commission if measured in terms of the value of the imports covered, according to the association.

Chinese exporters were particularly angered that two Chinese units of two European companies, Italy's Agrati and Spain's Celo which were behind the complaint, will be exempted from the duties.

"This means that all Chinese exporters will be excluded from the European market by the prohibitive duties while two of the major producers in Europe can continue to import Chinese-made fasteners without any duties," the association said.

"The Chinese industry questions the fairness of two European manufacturers asking for protection against Chinese fasteners when their own Chinese subsidiaries get total exemption from the duties through the backdoor," said Zhang.

The two European-owned Chinese producers were given special treatment through a process called "individual examination", which allows exporting companies that are not normally included in the sample to ask for their own individual duty rates but are not normally given by the European Commission because of lack of investigative resources.

"The question that arises is why major European producers like Agrati and Celo can continue to export to the EU without any anti-dumping duty while they are, just like other Chinese producers, benefiting from comparatively cheaper labor and alleged state subsidy," said Zhang.

"There seems to be a big contradiction here unless, of course, they simply want to have their cake and eat it by having protective measures in place against all Chinese producers except them," he added.

Robert MacLean, a trade partner at the law firm of Crowell & Moring in Brussels who represents Chinese exporters, said EU Trade Commissioner Ashton should not forget her pledge to resist protectionism.

"Having just warned against protectionist policies in Europe and elsewhere that could exacerbate the current economic difficulties in Europe, her department is proposing to introduce import taxes on citric acid, candles, food ingredients, mandarins and now iron and steel fasteners all coming from China," he said.

Ashton warned recently nations should refrain from protectionist measures in the face of the current financial crisis, which is dampening world economic growth.

The European Commission decided in November 2007 to initiate anti-dumping probe into Chinese-made screws and bolts, opening a new front of trade friction with China.

The Chinese government has insisted on solution of trade disputes through negotiations.