Trade tensions

The European Union is set to impose punitive import duties against certain Chinese products, diplomats told the news agency Reuters on Monday. This is in apparent retaliation against what the EU considers China's illegal export pricing, which is hurting the profits of EU producers. The duties are expected to come into effect by mid-September.

Trade diplomats from EU states reportedly backed plans by the EU Commission to introduce five-year duties of up to 69.7 percent on the bloc's imports of Chinese bathroom, kitchen and paving tiles, which are estimated to be worth 275 million euros ($395 million) annually.

Chinese bicycle and bicycle-part exporters also face an extension of existing anti-dumping duties of up to 48.5 percent until 2016, the diplomats said.

The duty extension, which must take effect by mid-October, is likely to ruffle feathers in China, particularly since the measures had originally been planned to last only three years until 2014.

Trade tensions

EU-Chinese trade relations have been strained in recent weeks by a World Trade Organization ruling that gives China fresh power to challenge EU tariffs on goods Europe says are being dumped on its market.

European bicycle producers, based largely in Germany and Italy, made the case that their business was under sufficient threat from unfair Chinese competition to warrant a five-year extension of duties - the maximum period permitted under EU trade rules.

China exported nearly 700,000 bicycles and related products worth about 430 million euros to the EU in 2009, despite the EU anti-dumping duty.

The duties, first imposed in 1993, have frustrated Chinese attempts to gain greater market share in Europe, where sales of bicycles and parts total about 5 billion euros a year. Duties have gradually increased over 18 years.

The extension was requested by the European Bicycle Manufacturers' Association (EBMA), which represents an industry employing around 20,000 people.

Fake products

A separate WTO ruling against Chinese export curbs on coveted raw materials is likely to be appealed by Beijing in coming weeks.

The resource issue is just one part of a tangle of tensions between the EU and China that also includes intellectual property rights.

European customs officials recently announced they impounded one billion euros worth of fake products in 2010 - 85 percent of which came from China.

The EU Commission said that Chinese product piracy has significantly increased in the past year.

Author: Ben Knight (Reuters, AFP)
Editor: Sam Edmonds