EU rejects China's fastener market economy status

The EU anti-dumping case against fasteners in China that has lasted for more than five months has brought an unfavorable news: According to the European Commission’s report on the market economy of fastener cases on April 29, including more than 90 companies in Jiaxing, The market economy status of all fastener companies in the case was completely rejected. This not only means that Jiaxing's business is counting on getting the lowest tax rate, but it also adds more uncertainty to the next step in the case.
At present, the game of interest is far from over. The efforts of enterprises and departments in Jiaxing City, Zhejiang Province, are still ongoing. Following the first trip of the Jiaxing company in late February, it was announced after the EU sent out the Jiaxing fastener company. It is understood that the second lobbying defense group organized by the Jiaxing Fasteners Import & Export Enterprises Association once again set off for a 10-day deal with the EU.

In this trip, the lobbying defense group will also visit and lobby representatives of the anti-dumping committees of the UK and Luxembourg, as well as lobbying parties including the European Automobile Manufacturers Association, the European Construction Industry Association, and the United Kingdom Retail, in addition to attending a hearing organized by the European Commission. Downstream customers of fasteners, including trade associations and the European Fastener Distributors Association.

"Because getting the minimum tax rate is no longer possible, it is even more important that there is no damage to the success of the defense. We have no way out," said Chen Qiang, vice president of the Jiaxing Fasteners Import & Export Enterprises Association, before an interview with the reporter. According to the information disclosed in the current market economy status, the damage-free defense has become the "life-saving straw" of the fastener company in Jiaxing. Only by fundamentally overturning this case, can the industrial interests of the fastener company be maintained.

Chen Zhen introduced that market economy status is the key to the company’s response to EU anti-dumping. With this status, it is possible to get a lower dumping rate. However, in recent cases, even the very few Chinese companies that obtained this status have not been given correspondingly lower tax rates. She believes that the current behavior of the European Union has fallen into a state of losing its legal system and being out of the ordinary. Including the sample survey of Jiaxing companies, there is also the problem of confusion in the representation of sample companies.

In fact, one of the key backgrounds of the EU’s chaotic situation in anti-dumping against China is that it is directly related to the EU's internal discussions on the rules. Zhang Fangfang, deputy director of the Municipal Bureau of Foreign Trade and Economic Cooperation, said that due to the special EU system, political parties, technical layers, member states and other aspects have more friction, and the result of their interest coordination is to sacrifice external interests.

According to Zhang Fangfang, based on the judgement that the anticipation effect is expected to be low, the meaning of no damage defense is even more significant. If the final defense fails, it will not only leave a regret in the European market, but will also affect the final and even future cases of US anti-dumping cases against fasteners in the United States that are also under investigation. This will certainly put Chinese fasteners in a long-term disadvantageous position.

Compared to the first time it went to Europe to lobby for public opinion, the second lobby was more pragmatic and targeted. One of the important agendas is that the European Commission will organize a separate hearing for Jiaxing fastener companies on May 16th. “It also shows that the European Commission attaches great importance to the defense activities of Jiaxing enterprises. It shows that our previous lobbying has achieved some positive results. The voice of Jiaxing has received a response.” Zhang Fangfang believes that this time the defense idea has changed. More empathic considerations from the perspective of EU interests, and the evidence cited are more informative, I believe it will have a positive impact on the judgment of the European Commission.

It is reported that the European Commission will make a preliminary ruling on damage and dumping on August 9, and make a final ruling in February next year. After this hearing, there is also a chance for hearing of Jiaxing's non-destructive defense.