EU trade chief suffers setback on China anti-dumping: official

(BRUSSELS) - EU Trade Commissioner Peter Mandelson suffered Wednesday a new setback over anti-dumping action on China, an official said, highlighting Europe's difficulty in crafting trade policy towards the Asian giant.

Mandelson's colleagues in the European Commission voted in favour of imposing anti-dumping tariffs against China over air compressors during two years, despite his recommendation not to.

The air compressor case has limited economic importance for the European Union as only Italy is concerned with a seven percent share of the worldwide market.

"But it's a question of principle for EU anti-dumping policy and Mandelson suffered a heavy defeat," an EU official said on condition of anonymity.

In reaction to the decision, Mandelson said: "It is a defeat both for those who wanted full measures and those who wanted no measures. The EU member states are divided down the middle, so a compromise is the only way forward."

The strongest supporters of anti-dumping action wanted tariffs over a five year period but the commissioners finally agreed on an initial two years given divisions on the subject.

Mandelson has frequently clashed with his German, French and Italian colleagues at the commission over anti-dumping cases, arguing that the benefits of such measures should not exceed their costs to European producers and consumers.

Similarly, Mandelson was also over-ruled last year by his colleagues in an anti-dumping case against Chinese-made energy saving light-bulbs and could face future battles over pending cases.

Mandelson shelved plans to revamp the European Union's anti-dumping arsenal last month amid concerns from some members of the commission that the shake up would weaken Europe's hand in such disputes.

"But my general position will remain that we should use trade defence measures only where they genuinely help European industry and workers," Mandelson said after his latest setback.

"Otherwise, we will restrict trade without benefit and that is not a sensible course for the EU to take," he added

In the air compressor case, Italian producers accused Chinese competitors of selling their products in Europe at up to 75 percent less than their production cost, which helped win support for anti-dumping action in the commission.