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Anti-Subsidy Brussels, 14 May 2011

EU imposes first ever anti-subsidy tariffs against imports from China

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In a 15 month investigation, the EU found that that the Chinese government was significantly subsidising its coated fine paper industry by giving cheap loans, allocating land below market value and granting various tax incentives which are illegal practices under WTO rules. After this first-ever anti-subsidy proceeding launched by the EU against China, tomorrow the EU will impose definite countervailing duties ranging from 4% to 12% on this high quality paper imported from China. The investigation also brought to light that Chinese producers of coated fine paper exported their products to the EU at dumped prices, hence the EU will impose anti-dumping duties ranging from 8% to 35.1%, depending on the producer.

"This is the first time ever we put in place measures against the strategic and targeted subsidisation of a specific industry by the Chinese government. All these subsidies are not in line with the obligations China has signed up to when joining in 2001 the World Trade Organisation. These measures will restore effective and fair trade conditions on the EU market", said John Clancy, EU Trade Spokesman.

The investigation, launched in February 2010, found that the dumped and subsidised Chinese exports exerted undue price pressure on the EU market which had a significant negative effect on the financial and operational performance of European producers of high quality printing paper, used mainly for catalogues and brochures. The definitive anti-dumping duties (8% to 35.1%) and anti-subsidy duties (4% to 12%) will be imposed on imported paper as of tomorrow for the next 5 years and can be extended if European producers or other parties ask the European Commission to determine whether the expiry of the measures leads to a recurrence of injury to the European paper industry.

The interest of users, such as printers, was also closely evaluated in the investigation. The impact of the measures will be very limited given the level of the duties and the fact that EU market remains open to sources of supply from other countries.  

Background

When an EU industry considers that imports of a product from a non-EU country are subsidised or sold at prices lower than the market value and therefore injuring the EU industry producing the same product, it can lodge a complaint with the European Commission. After the Confederation of European Fine Paper Industries (CEPIFINE) lodged such a complaint regarding Chinese fine coated paper imports and provided evidence as regards subsidies, dumping and the caused injury for European producers, the Commission initiated an anti-dumping and an anti-subsidy proceeding on 17 February 2010 and 18 April 2010 respectively.

The European Commission imposed provisional anti-dumping duties on 17 November 2010, ranging from 19.7% to 39.1%. No provisional anti-subsidy duties were imposed. After the Council of the European Union confirmed that definitive measures are warranted, it has been decided to impose definitive measures for the injury caused both by subsidisation and dumping. The measures imposed by the EU are in line with WTO rules.

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