WTO Investigates EU Charges On Chinese Screws

GENEVA (AP) -- The World Trade Organization opened an investigation Friday into whether European Union charges on imports of Chinese steel fasteners comply with international commerce rules.

Beijing argues that the EU is illegally taxing steel fasteners needed for products from furniture to cars, but the 27-nation bloc says Chinese manufacturers are breaking trade rules by selling a flood of screws at 30 percent to 50 percent below European prices.

Brussels passed on a chance to delay the probe, saying it is "strongly convinced of the strength of its case."

In other proceeding at Friday's WTO dispute meeting, the EU blocked until at least next month a U.S. complaint about European barriers to American poultry. The United States, meanwhile, delayed the establishment of a panel to look into a complaint by Canada and Mexico about country-of-origin requirements for cattle and hog imports.

The screw dispute between the EU and China is highly sensitive. The two parties held negotiations in Geneva last month that failed to break the deadlock, and heavy lobbying by Chinese screwmakers earlier this year also had little effect.

In January, the EU slapped Chinese exporters with trade charges ranging between 26.5 percent and 85 percent for five years, arguing that below-cost selling by Chinese companies prevented European producers from gaining extra market share as sales boomed in recent years.

Governments investigate dumping when they suspect foreign producers are exporting goods at artificially low prices -- usually as a result of subsidies or in an attempt to corner a market.

But Beijing argues that the action unfairly penalizes the commercial interests of over 1,700 Chinese fastener producers.

Chinese screwmakers complained in February that the EU's actions would hurt consumers without helping European producers. Manufacturers from Jiaxing city in Zhejiang province in eastern China -- representing a quarter of Chinese screw exports -- say they are unfairly being singled out because they charge the same as Taiwanese producers and more than rivals based in Malaysia, Vietnam and India.

The WTO cannot force countries to comply with its rulings, but it can authorize commercial sanctions against nations continuing to break the rules. Trade cases generally take years to reach that point.

The U.S.-EU poultry dispute was launched by the United States in the final days of ex-President George W. Bush's tenure.

It was seen as a farewell gift from the Bush administration to the American farm lobby and a final insult to the EU after years of sometimes bitter trade and political disputes. It was inherited by the Obama administration, which has gone ahead with the case.

The U.S. and the European Union have argued for more than a decade over EU restrictions on imports of poultry treated with four anti-bacterial chemicals: chlorine dioxide, acidified sodium chloride, trisodium phosphate and peroxyacids. Each has been approved for poultry processing by the U.S. Food and Drug Administration and the U.S. Department of Agriculture, but the EU has blocked poultry carcasses processed with such treatments since 1997.

The WTO will almost surely set up a panel at its next dispute meeting in November. Countries aren't allowed to block the start of WTO investigations twice.

The North American dispute concerns U.S. rules approves in 2008 that no longer allow meat from Mexican and Canadian cattle that are raised and slaughtered in the United States to qualify as being of U.S. origin.

Canada and Mexico say the provisions pose an unfair impediment to fair competition. Washington defends the labeling as a legitimate way to provide greater customer information.

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