Brussels accused of secret trade shift

By George Parker in Brussels
Published: June 3 2007 22:01 Last updated: June 3 2007 22:01 (www.ft.com)

European companies are being exposed to cut-price dumping by foreign rivals because of a secret change in trade policy in Brussels, 10 big industries have claimed.
Peter Mandelson, European Union trade commissioner, has denied claims that Brussels covertly lowered Europe’s defences against unfair subsidies by other countries and has shown “unequivocal political bias” against anti-dumping measures.
The allegations are made in a letter from industry bodies representing 10 of the European industries most exposed to global competition, including textiles, chemicals, metals, mining and fertilisers.
Writing to José Manuel Barroso – European Commission president and Mr Mandelson’s boss – they claim that the trade chief has changed his handling of anti-dumping cases behind the backs of member states.
Brussels instigated 36 anti-dumping measures last year – including controversial cases involving Chinese shoes, plastic bags and bicycle parts – but there has been none this year.
“The Commission’s changed practice is more and more widely perceived as an anti-industry policy bias,” the industries claim.
Mr Mandelson launched a consultation in December on reforming Europe’s anti-dumping rules following clashes between countries such as Britain and Sweden – dominated by big retailers who want low-cost goods for consumers – and manufacturing countries such as Italy, Spain and Portugal.
The commissioner says that, unless a balance can be found between the two sides and unity is restored, Europe’s trade defence mechanism “risks becoming inoperable”.
Mr Mandelson has also pointed out that European manufacturers that outsource production to Asia are among those hit by anti-dumping measures as well as consumers.
The 10 industry bodies suspect Mr Mandelson has already made up his mind and has tilted implementation of anti-dumping rules away from European manufacturers even before the trade defence consultation is complete.
“Facts demonstrate that the Commission is already implementing a policy line which not only disregards the outcome of the public consultation but also compromises the existing rule of law and flouts the right of defence,” their letter says.
Mr Mandelson’s team flatly denies any change of policy, arguing that the absence of any new anti-dumping measures in 2007 was simply “the calm after the storm” of controversial cases last year.
Mr Mandelson’s officials also point out that their assessment of anti-dumping claims are closely governed by European law. They also say that Europe’s improved economic outlook means EU companies are less likely to suffer harm from low-cost imports.
A spokesman for Mr Barroso insisted the Commission was sticking strictly to the law. “We welcome any contributions to the consultation,” he said.
Copyright The Financial Times Limited 2007