Deense studie: EU-regelgeving inzake anti-dumping schaadt consumentenbelangen (en)

BRUSSELS / EUOBSERVER - EU anti-dumping policy harms the economy and protects big producers at the expense of consumers, according to a new Danish study - but the European Commission believes the measures will save European industry in the long term.

The World Trade Organisation (WTO) brought in anti-dumping rules in 1994 in an attempt to open up international markets while preventing firms from selling goods at a lower price abroad than they do at home.

The practice, also called predatory pricing, can be used to build market share in the export destination and drive local producers out of business.

Under EU law, the commission can impose tariffs on dumped imports, provided that the duties would not harm overall community interest.

Trade hit the headlines last month as millions of Chinese jumpers piled up in ports after Brussels imposed quotas to shield European manufacturers.

But with permanent quotas becoming a thing of the past under the WTO, some economists fear the EU will turn to anti-dumping laws to shut out foreign competition.

Brussels has already launched 17 anti-dumping probes and imposed 14 measures in the first six months of this year compared to 24 probes and measures in 2003 and 2004 combined, heavily targeting China on shoes and plastic bags.

Community interest at risk

EU anti-dumping measures do more harm than good by failing to properly analyse the principle of community interest however, according to a new study by Danish firm Copenhagen Economics and the Danish ministry of economics.

The report presented in Brussels on Wednesday at the Centre for European Policy Studies (5 October) studied four EU anti-dumping cases concerning salmon, bed linen, TV sets and fertiliser from 2002 using an economic tool called the Copenhagen Anti-dumping Model (CAD).

In each case, the tariffs ended up costing consumers tens of millions of euro per year more in higher prices than they benefited the producers, leading to a net loss for the community as a whole.

The tariffs also shifted more money from European consumers' pockets into the commission's budget than into the European producers' coffers.

"The commission often talks in terms of consumers paying just €0.50 more for a product in order to save 1,000 jobs. But with around 300 million consumers that works out at €150,000 per job. Maybe you could use the money better for investments or pensions", Copenhagen Economics' partner Martin Hvidt-Thelle said.

Justice at what price?

The commission lashed out at the CAD model, saying it is too simplistic and does not take into account factors such as gains made by European suppliers to European producers under anti-dumping protection.

Commission trade expert Xavier Coget explained that Chinese and Indian firms are growing quickly, taking advantage of the fact that EU companies have less access to their domestic markets than vice versa.

"They will in the end weaken the community industry and take over", the French official added. "Unfair trade practices have to be countered. We want to do justice and justice might have a cost".

Leading German chemicals producer BASF bolstered Brussels' arguments, saying it can cost up to €460,000 to create a job in the chemicals sector, which in turn creates two or three other jobs indirectly.

But legal experts Van Bael & Bellis also raised question marks over the commission's work, saying there is no objective way to assess if the interest of producers or consumers should come first.

"Community interest is the interest of whoever gets the support of the commission and a simple majority of member states", the firm's partner Jean Francois Bellis said.

"It's a messy process with a lot of lobbying, but as long as we don't take the bold step of stopping anti-dumping measures, we'll basically have to muddle through as we do at present".