A new report, EU Trade
Barriers Kill, published today in the run-up to the
Enlargement is worth something for the EU. At
least this became clear to
Manufactured goods prices in the EU are kept up by the cleverly concealed "anti-dumping" policing of imports from the Far East. To avoid anti-dumping duty, importers raise their prices in the EU well above world levels - effectively a CAP for manufacturers. Again, as new entrants from eastern Europe come inside the EU's protective customs union, their manufacturers too will receive this protected price. Who will pay the bill? You guessed. We will be the main contributors. It probably costs us about 0.5pc of our GDP (£5 billion a year) to pay the inflated prices of our large net manufactured imports. Because the big three of the EU do not like the idea of free competition in the labour market from a mass of Poles, Hungarians and Czechs with low wages and free access to the EU market, the price of entry is increasing regulation of their markets. The Social Dimension of the EU is an agenda to reduce labour market competition by embedding expensive worker rights into all EU member countries' laws. The politics of being involved with the EU appeals to our Foreign Office as a modern extension of the old "balance of power" game we historically pursued in Continental politics. But the economic cost is proving prohibitive - 2pc of GDP in payments up front (one third of the cost of our National Health Service) and much more damage from regulative interference mandated from Brussels. (Daily Telegraph - Patrick Minford 30/12/2002 )
Thirteen years after escaping from socialism, the ex-Comecom states are being forced to join the Social Chapter, the euro and the Common Agriculture Policy, impose the 48-hour week, subject their enterprises to a barrage of Brussels regulations and, in many cases, raise tax. Meeting these terms will mean giving up their greatest asset: the ability to price themselves into the market. Why, then, are they queuing to join? Because the alternative is so miserable. For all its warm words, the EU is a pitiless commercial neighbour. It is happy to lecture others about free trade, but it has been quick to close its own markets to foreign produce. Western European workers are protected by a phalanx of import quotas and "anti-dumping" measures from eastern European coal, steel, textiles and agricultural goods. Hungary, for example, is selling less food to the EU today than at the height of the Cold War. (Sunday Times 15/12/02)
EU subsidies for powdered milk exports have squeezed 20,000 poor farmers out of milk production in the Dominican Republic, while the EU has at the same time been spending 23 million euro on a development project to boost the country's own milk production. The EU development project initially looked like a success. 23 million euro spent on boosting milk production in the Dominican Republic caused a boom in local milk production, writes Danish paper Jyllands-Posten. The only problem was that no one wanted to buy the locally produced milk, preferring the cheap EU-produced and EU-subsidized milk powder. We used to be self-sufficient The leader of the local project, David Cueto, said to Jyllands-Posten: "What we won through the EU support scheme was lost through the bankruptcy of many farmers because of unfair competition from the EU-subsidized milk powder. 20,000 farmers were squeezed out of production." (EUobserver.com 13.11.2002)
AN internationally renowned Birkenhead firm that made propellers for almost every famous British ship of the 20th century is about to close, because Brussels has allowed the German government to pour lavish subsidies into its main competitor. Whenever Stone Manganese Marine has recently tendered for contracts to supply propellers for ships built in the Far East, it has found that its German rival Mecklenburger Metallguss has undercut its prices by up to 20 per cent. This is the result of a subsidy deal that would normally be illegal under EU law, but for the personal backing of the EU's competition commissioner, Mario Monti. Next month SMM will lay off most of its 54 employees, leaving the East German firm, which three years ago was still a struggling relic of Communism, the largest marine propeller manufacturer in the world. But now the British firm has been forced out of the market by its heavily subsidised German competitor, which has even been able to outbid SMM on supplying propellers to the Royal Navy's new Type-45 destroyers. Originally based at Millwall on the Thames, SMM's foundry was bombed nine times by the Germans in the early years of the Second World War and in 1942 moved to Birkenhead. It remained at the forefront of world manufacture through the post-war period, shifting much of its production to export as Britain's shipbuilding industry melted away. But in 1999 Brussels allowed the German Government an exemption from the rules against state aid, so that it could plough further millions of euros into the "restructuring" of a small, hopelessly inefficient former East German state company, sold off after re-unification as MMG. Mr Monti pointed out that the decision to exempt the German firm from state subsidy rules had been arrived at in accordance with recognised EU procedures; that as Commissioner he had absolute power to decide whether subsidies should be allowed; and that if SMM had wished to call for an annulment of his decision it should have done so within two months of the decision being published in the Commission's official journal on December 24 1999 (where it was available only in German). The last straw came when, under EU procurement rules, the Royal Navy even had to give preference to the German firm on contracts to supply propellers to its latest class of destroyers. Next month the British firm is having to lay off its skilled workforce and close its foundry. (14 Apr 2002 - Chris Booker's Notebook, Sunday Telegraph) In September SMM closed its Birkenhead foundry, putting 50 employees out of work. It has now contracted to build its propellers at a modern yard built with state subsidies in China. Supporters of Britain's membership of the EU will doubtless be pleased to see another chunk of British history consigned to oblivion. (S Telegraph 29/12/02)
The European Union is demanding full-scale privatisation of public
monopolies across the world as its price for dismantling the common agricultural
policy in the new round of global trade talks, secret documents leaked to
the Guardian revealed yesterday. The sweeping requests for the opening up of
sensitive sectors of its trading partners' economies including water, energy,
sewerage, telecoms, post and financial services are contained in a 1,000-page
draft document prepared by Brussels officials for approval by member states next
month. Europe has spelled out in detail a long list of restrictions which it
wants its trading partners to drop. These include requirements that New York
estate agents be US nationals, a ban in Mexico on foreigners owning land within
50km of the border and rules in Korea restricting the sale of alcohol to
licensed providers. Many of Europe's demands are likely to meet with bitter
opposition from its trading partners, resentful that Brussels is dragging its
feet on opening up its own markets in key areas. In some areas, such as energy
and postal services, Brussels wants other countries to break up national
monopolies which its own member states have been reluctant to tackle. The draft
negotiating strategy has provoked alarm among development campaigners who fear
the ultimate goal is to push poor countries into privatising public services
like health and education. "We are shocked by how the the EU is preparing
to trample over its claims to be in favour of sustainable development in the
naked pursuit of the interests of European multinational service corporations,"
said Dave Timms from the World Development Movement. "These documents
confirm our worst fears about these negotiations. The EU is targeting sectors
where there is no evidence that liberalisation benefits developing
countries." (The
Guardian 17 Apr 2002)
A report by Oxfam finds that the EU has higher barriers than any other large industrialised economy to imports from developing countries, despite its move last year to open its market to products from the very poorest nations. Oxfam claims that by preaching free trade while protecting their own markets, the world's poorest countries are being robbed off billions of dollars each year. Since the richest countries subsidise their products, the farm crops exported by these countries are relatively cheap, with the consequence of driving also down the prices for exports from developing countries. "Some of the world's poorest countries are competing against its richest treasuries". (EUobserver.com 15.04.2002)
In 1980, 31 per cent of humanity were living on $1 a day. By 2000, this was down to 20 per cent. Free trade was the main engine of this development. And the main beneficiaries from free trade were the poor. The main opponent is protectionism. The protectionist European Union is like the planned economies of the old Soviet Empire in its obsession with regulating and protecting. Regulating trade in agriculture and textiles - the main products of the poor world - cost the European Union nearly six per cent of its gross domestic product. On agricultural subsidies alone, the rich world as a whole was now spending $360 billion every year. This was to the benefit of no one. (Johan Norberg, the author of ‘In Defence of Global Capitalism’ 8/4/02)
China has launched a new attack against European Union’s decision to ban imports on Chinese foodstuffs by accusing EU of breaking World Trade Organization rules, reports the EUbusiness.com. The EU had imposed this decision as it saw that they did not satisfy the necessary health requirments. (Euobserver.com 12.02.2002)
Third world countries like Ghana rely on the export of raw cocoa at very low prices. They cannot process the raw material into chocolate because the EU imposes a 300% tariff. (Tony Blaire speech 8/2/02)
South African citrus farmers were excited when they had good weather and a bumper crop. They thought they would be able to sell to the EU. But EU farmers had a poor crop and persuaded the EC to curtail imports from South Africa. (BBC R4 Correspondents Look Ahead 6/1/02)
A landmark ruling by the European Court of Justice in Luxembourg on Tuesday has banned British supermarkets from selling a wide range of designer goods at greatly reduced prices, writes the Telegraph. The court ruling said that the policy of British supermarket chain Tesco of selling Levi Strauss jeans purchased inexpensively in the US was illegal. The judgement will have implications for other products, also. Supermarkets will still be allowed to sell designer clothes, watches, champagne and cosmetics at reduced prices - but only if they buy them in the EU. John Gildersleeve, Tesco's director, said: "Customers will be dismayed that once again the European Court has failed to loosen the shackles and allow us to bring in the products they want." Carlos Criado-Perez, chief executive of Safeway, said that the decision was a setback for free trade. (EUobserver.com 23/11/01)
The EC is to put the brakes on the Government's plans for venture capital funds in the regions, on the grounds that they could become backdoor state aids. The Viridian growth fund is only to be allowed for small operators, not medium sized companies. The Government had planned to pump £50m into these schemes. (Financial Times 6/2/01)
The decision by the European Commission to block the merger between General Electric Co. and Honeywell has prompted harsh criticism by American President George Bush and other top US officials, including Treasury Secretary Paul O'Neill, according to CNN. Several US senators accused the EU of "protectionism" and have warned that rejection of the GE deal could hurt transatlantic trade relations or bring retaliation from Washington. Mario Monti, Commissioner for competition, rejected US criticism of the decision, according to the International Herald Tribune. This was by no means an EU versus US case, he said. Yes, the two companies were American, but their nationality was irrelevant. Not only is this the first time that the European Commission has decided to block the merger between two American companies, but it also ruled despite antitrust regulators in America reaching the opposite conclusion. (EUobserver.com 04.07.2001)
Nancy Abeid Arahamane says that even a camel could tell you why poor countries remain poor. .For the past seven years, she has been trying to sell pasteurized camel cheese to the European Union from her modern dairy in Nouakchott, Mauritania. .She found a German importer to take her entire production. But then she discovered that the EU does not have any specific regulations concerning camels. It would need a special directive to allow her to export, and this would have to be approved by the European Commission, Parliament and Council and be translated into 11 languages. ."The bureaucracy is incredible," she said in a phone interview. "For 80 kilos of cheese a day, no one cares. But it would help a lot of people." .Mrs. Arahamane could tell you all about unfair competition from the rich West. Building a state-of-the-art dairy in a desert nation was never easy. Mrs. Arahamane, a British-born engineer, started the project after she realized that Mauritania had a lot of milk-producing animals but imported enormous quantities of milk to meet domestic demand. .Although she has succeeded in a business producing 13,000 liters (345 gallons) of milk a day, Mrs. Arahamane said she was undercut by milk and milk powder from the EU that is made cheap by export subsidies. She said: "It is just not economic to make butter in Africa. Poor countries can't compete." .She is convinced that opposition from the European dairy lobby is one reason she cannot find a market for her company's camel cheese in the EU, despite its advantages such as low cholesterol, high vitamin content and suitability for people who are allergic to dairy products. .She needs that market because while cheese production uses up surpluses of milk in a seasonal trade, Mauritanians are not used to eating cheese. .The dairy seems like just the kind of bootstrap operation that international development experts go on about. But, Mrs. Arahamane said, experience teaches that "no one wants us to pull ourselves up by our bootstraps." (International Herald Tribune Monday, May 14,)
Agricultural export subsidies have plummeted from 25% to 9% of the value of our agricultural exports.( SPEECH/01/227 Dr. Franz FISCHLER)
The BBC Radio 4 programme 'File on Four' did a feature on government contracting scams in the EU. Two methods were 'penalty clauses' and fictitious 'R&D' contracts. The penalty clause scam can work like this: If , say, a ship builder wanted to get the contract to build a new warship then there would be automatic penalty clauses built into the contract with the government. These would say that if it wan not finished in a set time then the contractor would have to pay a penalty (normally of a set amount for every day over the time). However there would also be a clause that said that if the ship was finished ahead of time then a bonus would be paid (again of a set amount per day or week). Then by setting an extremely long delivery time for the ship which the builder would be bound to meet and beat by perhaps months, the government could quite justifiably pay a subsidy to that company disguised as a bonus for doing a good job. There have been several alleged examples of R&D contracts being awarded by Commissioners to their friends. In return for substantial fees they do practically no work, or simply copy passages from known texts on the subject. If the contractor is paid for hours worked it is also a simple matter to inflate the number of hours, and the Commission is too disorganised to run any checks or audit even if they wanted to - which they do not if there is a scam. (Eurofaq postings March 2001)
The Commission has increased the number of anti-dumping investigations initiated in 1999, but has justified these by explaining that these were caused by the economic crisis in the Far East. Critics of the European Commission and its protectionist policies have pointed out that the number of anti-dumping cases has grown with great rapidity. 86 new investigations were started in 1999 after only 29 in the previous year. At the end of last year the Commission had 130 ongoing cases. Their defence was that 1999 was a particularly difficult year as the economic crisis in the Far East encouraged those countries to try to sell their goods cheaply abroad after the collapse of the home market. Some commentators have argued that this was one way for the Far Eastern countries to try to trade their way out of their difficulties and the European Commission was preventing them from so doing. The Commission institutes cases if an EU firm complains about outside competitors selling goods at unrealistically low prices. As EU prices tend to be on the high side, "unrealistically low" describes many things. (EUobserver.com 29/11/00)
European Union Trade Commissioner Pascal Lamy on Friday stressed the need for the world's biggest trading partners to avoid shouting threats at each other in a dispute over U.S. tax breaks for exporters. "We all know that trade disputes are quite normal in view of the huge volume of trans-Atlantic trade," Lamy said at business conference just hours after Brussels took steps to preserve its right to retaliate on as much as $4.04 billion worth of U.S. goods. On Thursday, President Bill Clinton signed legislation to replace FSC with a new system of tax breaks for exporters. In February, the World Trade Organization ruled that FSC was an illegal export subsidy, handing the EU a major trade victory. Under WTO rules, the EU had to inform the WTO by Friday of its intention to retaliate in order to preserve its right to take that action. Its request for $4.04 billion in sanctions on U.S. goods is the largest ever made to the WTO. (CINCINNATI, Ohio, Nov 17 2000 Reuters)
Brussels, Nov. 10 (Bloomberg) -- The European Union is likely to ask the World Trade Organization to authorize more than $4 billion in annual tariffs on U.S. goods to retaliate for what it says is the U.S.'s failure to amend an illegal tax break for American exporters, a person familiar with the EU's case said. The sanctions -- to be requested Nov. 17 -- would be the largest ever sought in the WTO's six-year history and are likely to exacerbate tensions between the world's largest trading blocs, already soured by spats over bananas and beef. The dispute could also potentially damage EU relations with the new U.S. president. (Bloomberg.com 10/11/00)
The Financial Times reported that European Union food safety standards estimated to save not even one life a year are likely to cost African countries some $700m in lost exports, according to a new study by World Bank researchers. The Financial Times claimed that the study, one of the first to have investigated the effects of health standards on trade, raises questions about the consequences of the European approach to food safety. This is based on the so-called precautionary principle, whereby restrictions or regulations on food imports are justified while the scientific risks to health remain unproven. According to the FT, critics of the approach argue that import restrictions - such as that imposed in Europe on hormone treated beef - have been employed without sufficient support in international science. The paper emphasises that the cost of such regulation can be high, especially for poor countries trying to reach rich markets. The study, reports the FT, examines the effects of a European regulation limiting the amount of aflatoxins - a fungus-like substance whose presence in food has been linked to liver cancer - in imported food. The EU regulation insists on a tighter aflatoxin standard than those recommended by Codex, which sets international food standards, or by the World Health Organisation and Food and Agriculture Organisation in the US. The regulation was made in 1998 for implementation this year. The World Bank study calculates that the difference between the EU and Codex standards will save two lives for every billion people. The population of the EU is about 380m. But the tighter standard will reduce exports to Europe of cereals, dried fruit and nuts from just nine African countries - Chad, Egypt, Gambia, Mali, Nigeria, Senegal, South Africa, Sudan, and Zimbabwe - by 64 per cent, or $700m. Europe is the main purchaser of African commodities. The FT reports that the research, supported by finance from the UK's Department for International Development, also found that the sampling method used by the EU would further reduce African exports compared methods used elsewhere, including the US. This is because aflatoxin levels vary considerably from shipment to shipment. A negative result in one tested shipment is enough to stop imports into the EU, whereas the US and others average their test results. According to Australian estimates, the European sampling method would lead to a 20 per cent rejection of Australian cereals. The FT reports that the US peanut industry has estimated that complying with the EU sampling method would result in an $150 extra cost per 16-tonne lot for raw groundnuts and lead on average to the rejection of 30 per cent of US peanut exports. Rejection rates for African produce could be expected to be much higher. (October 25 2000Democracy Movement 26/10/00 http://www.democracymovement.org.uk/main/ )
Mussels can undoubtedly cause illness and the checks on their environment have to be in place: The French and Spanish operate a 7 hour test, the English over 5 the Dutch 6 and so on. The Irish used to operate a 6 hour test but, in 1996, there was a complaint to French authorities because some people became ill - a link to Irish mussels was never proven - but the French demanded that all mussels imported from Ireland should be tested over 24 hours. This has resulted in some Irish Bays being closed for eight out of twelve months of the last year - thus decimating the Irish catches. A telling paragraph reads: "Our problem is a combination of French distrust of food production that isn't their own and the terrible weakness of our own authorities, the Department of the Marine. The nature of the industry in France is that a lot of mussel producers also import and distribute. If they block imports, it makes their own product more valuable. (Saturday Telegraph Cooking 16/9/00)
BERLIN -- Wal-Mart's "Always Low Prices" were too low for strict German regulators, who ordered the U.S. giant and two German rivals Friday to call off their price war on groceries because it could drive mom-and-pop shops out of business. The German Cartel Office found that Wal-Mart and the Aldi and Lidl discount supermarket chains were selling staples such as milk, butter, flour, and cooking oil below cost on a regular basis. That practice is illegal in the highly regulated world of German retailing. (9/9/00 The Associated Press)
See "Farming" about cost of chemical fertiliser and new import tariffs imposed by the Commission (FT 8/9/00)
The Spanish Government dislikes the idea of giving duty-free access to the EU of 95 per cent of all Balkan imports, which, as a matter of interest, amounts to a staggering 0.16 per cent of the EU's total imports. Even this, Spain argues, would have serious repercussions on EU producers. Instead, they propose two temporary quotas with an annual increase in volume. A bonanza for officials, in other words, unending possibilities for bribery and open encouragement for the people of the Balkans to try to escape from intolerable economic conditions. Other member states have been tut-tutting about Spain's intransigence. Not that they have suddenly gone over to the benefits of free trade and economic development instead of aid and dependence. Far from it. Quotas will be retained for "sensitive" goods such as beef, fishery products and agricultural produce as well as the inevitable textiles. (Eurobrief 3 3/9/00)
The Recreational Craft Directive is primarily an attempt by large European manufacturers to restrain trade and limit competition at the expense of the customer. For example, it contains three provisions, that one-off and custom designs must meet all the requirements for serial production, that amateurs are forbidden to sell their constructions for five years, and that effectively, it is illegal to import used boats. None of this has any bearing on the nominal purpose of the RCD, or the facilitation of interstate commerce. All serve as barriers to trade. (Practical Boat Owner September 2000)
Trade protection costs the EU between 6% and 7% of its gross domestic product, or the equivalent of the annual economic output of Spain. (Prof. P A Messerlin, Institute d’Etudes Politiques de Paris – Eurofacts 21/1/00)
Malleable cast iron fittings from six, mainly third world, countries are subject to anti-dumping duties ranging from 6.3% to 49.4%. (European Voice 2/3/00)
The EU adopted definitive anti-dumping duties, which normally last five years, on imports of potassium chloride from Belarus, Russia, and the Ukraine. (European Voice 11/5/00)
The removal of tariffs between the 48 poorest countries and rich markets in the EU and America is the basic requirement for world trade negotiations, Clare Short, the International Development Secretary, said. She conceded that an obstacle to the EU's "zero tariff" offer was a number of EU countries that was still opposed to dropping trade barriers for agricultural products. The EU, for instance, can dump cheap beef in Zimbabwe while Zimbabwe faces trade barriers if it exports beef to Europe. (Daily Telegraph 30/11/99)
Brussels abandoned legal moves to force France to open its markets immediately to British beef. The European Commission announced that it would not seek an injunction in the European Court of Justice. Officials also admitted they might jettison other "Fast-Track" court action against France for failing to comply with a European Union decision to allow imports of British beef from last August. Ordinary cases at the European Court of Justice take an average of 22 months. Germany is likely to take advantage by refusing to drop its own ban until the matter is resolved. (Daily Telegraph 14/1/00)
Lands End, the US mail-order retailer, is expected to file a formal complaint with the European commission over German law aimed at restricting supposedly unfair trading practises. The move follows a decision by the Federal Supreme Court, which ruled that Land's End's offer of lifetime guarantees on its range of clothing violated the German Free Gift Act of 1932, and was anti-competitive. Land's End is expected to argue that the German law is discriminatory, as the company can advertise its guarantees in other EU countries. The Commission has already launched legal challenges to the laws, following complaints from PolyGram and American Express. PolyGram was prevented from offering a two-for-the-price-of-one commission in Germany, American Express from offering free air miles in Germany. (Financial Times 11/1/00)
The European Commission opened 11 legal challenges against Germany, Austria and Italy for not ensuring that public procurement contracts are awarded under open and competitive conditions. A spokesman said many more cases were in the pipeline as the Commission acts on concerns that European Union countries are not opening up the public procurement procedures to companies from other member countries. (Financial Times 14/1/00)
Cannongate Technology, a small Edinburgh based company makes gas analysers. Its products meet UK standards and are used in Italy and the Netherlands. But the Germans would accept only their own TUV certification. The company says this costs up to £40,000 and can be obtained only in Germany. It has been trying to get approval for five years. At the moment they are effectively unable to get orders. (FT 13/10/99)
A resident in France would like to use Barclays' on-line services. The services, however, are inaccessible from only two countries in the world - Malaysia and France. France won't allow Barclays encryption code of 128 kilobytes - but these codes are normally part of the European Telecom regulations issued by CCITT. It is especially rich coming at a time when first-e.com bank is offering its Internet services in the UK. This service is offered by Banque d'Escompte - a French bank and has established itself on "www.first-e.com". (Eurofaq posting 17/12/99)
Trade protection costs the European Union between 6 and 7% of its gross domestic product, or the equivalent of the annual economic output of Spain, according to a study by leading French economist, Patrick Messerlin. This is the first attempt to measure the impact all types of protection, including anti-dumping measures, non-tariff barriers and subsidies, as was tariffs. This level of "global protection" has amounted since 1990 to between 13 and 14% of the output of EU goods. That is two to three times higher than previously estimated. The cost of using trade barriers to maintain employment worked out at £143,000 for each job saved, ten times the European average wage in the sectors concerned. Yet protection has saved only 3% of all jobs in the sectors. EU producers benefiting from protection have a huge incentive to resist trade liberalisation. The study is based on an analysis of 22 of the most highly protected agricultural, industrial and services sectors in the EU. It puts the economic cost of trade barriers in the sectors at £60bn in 1990 and says levels of protection have changed little since then. The study finds that the levels of protection in EU manufacturing, and the economic cost, a higher even then in agriculture. The highest cost of protection is within the textiles and clothing industries, where they almost equalled the total cost for agriculture. www.iie.com (FT 10/11/99)
The Organisation for Economic Co-operation and Development has shown that after farm prices plummeted, the OECD countries increased farm support spending by 8% in 1998. There has been a marginal improvement in prices this year, but there is little hope of a full recovery. Protectionism, therefore, has a strong ally in depressed farm incomes. In the US, some senators are already lobbying for the reintroduction of subsidy regimes dismantled only three years ago. The excuse? The EU's failure to liberalise its own agricultural regime. (FT 19/11/99)
When apartheid was defeated in South Africa the EU promised to help the country overcome the economic aftermath of the old regime. Germany is now leading attempts to exclude 40% of their farm exports to the EU, including Outspan oranges, tinned fruit and wine. (Indy 9/7/96) The EU Standing Committee on Plant Health is proposing to ban the import of citrus fruit from South Africa, Zimbabwe and South America, where the UK gets its entire summer citrus supply, using pseudo-scientific grounds. Ostensibly aimed at protecting European citrus plants from pests it would set a catastrophic precedent for the organic fruit and vegetable crop. Pests do not survive the UK climate. The result means the entire citrus market will be handed to EU citrus suppliers and prices will rocket. (Independent 28/2/97). A trade agreement has been concluded with South Africa after three and a half years of negotiations. (Week in Europe 1/4/99).
The European Union's trade and co-operation pact with South Africa is in danger of collapse after a new flare-up over the use of the terms port and sherry for South African fortified wines. Spanish diplomats in Brussels said 5 EU countries would not allow the agreement to go ahead until South Africa gave written guarantees that it would phrase out the terms port and sherry. (FT 7/10/99)
South Africa condemned European attempts to protect more than 150 traditional expressions used to describe wines and spirits, saying that it would be betraying other developing countries if it yielded the European Union's demands. The five EU wine producing nations have already secured a South African promise to begin phasing out the use of the words "port" and "sherry." Now they want the South Africans to drop dozens of other words and terms as well, including "grappa", "ouzo", "ruby", "tawny" and such anodyne phrases as a "regional wine" and "vin de pays". (FT 5/11/99)
The owners of British coal pits are suing the Commission over alleged illegal subsidies to German and Spanish producers, which are so big that if British mines were to get the same aid they could afford to give the coal away. (Times 23 December 1998)(FFP 26).
RJB Mining, Britain's biggest coal producer, is seeking at least £70 million of government aid to prevent further pit closures. Stephen Byers, the trade and industry secretary, told MPs that industry requests for aid needed to comply with European Union regulations: "there are difficulties in terms of the way in which Europe treats state aid to the coal sector, but we have had a request and it is only right that we consider it." (FT 16/2/00). The coal industry was dealt the latest in a succession of blows that have left it on the brink of extinction. British Energy said it would review its coal suppliers when it takes over Eggborough power station. It appears certain to switch to foreign imports, which are up to 30% cheaper and have lower sulphur. The industry has shrunk from 1,000 deep mines in 1947 to 17 last year. Helen Liddell, energy minister, rejects criticism that the government has not done enough to combat unfair subsidies. Ministers have complained vigorously to Brussels. (FT 29/2/00) British coal is produced at half the cost of German coal and a quarter the cost of Spanish coal (BBC R 4 1/3/00)
"The most outrageous example of protectionism was in agriculture. In the mid-1970s, your country was selling over 100,000 tonnes of beef a year to the European Community. By the mid-1990s, despite the enlargement of the EU, your quota had been reduced to 6,500 tonnes a year." (Speech by W Hague in Budapest on 13 May 1999)
Nearly
two thirds of Russia’s planes would be banned
Nearly
two thirds of Russia’s planes would be banned
flying in European skies if new EU legislation on noisy aircraft comes into
play, writes the Russia Journal. Only 35 per cent of long-range aircrafts meet
the EU requirements starting from
April. (EUobserver.com
21/2/02)
EU Ministers approved new
regulations on aircraft noise that should end another dispute with the United
States over adopting international norms. The measures repeal a 3-year-old EU
regulation banning older planes equipped with noise-reducing mufflers, known
as "hush kits." U.S. officials complained, saying the hush-kit ban has
cost American companies and airlines more than $2 billion in lost sales and
fleet depreciation. "These (complaints) are now definitely resolved,"
Spanish Transport Minister Francisco Alvarez-Cascos said. In a statement issued
in Washington, the U.S. State Department said it would withdraw its complaint
about the hush-kit regulation at the next meeting of the International Civil
Aviation Organization in mid-April. "This action will remove a major
obstacle to productive engagement on aviation environmental issues between the
United States and the European Union," spokesman Richard Boucher said. (AP
March 26, 2002)
The EU has bowed to intense pressure from Washington and delayed a decision to outlaw new aircraft equipped with Hush-kits. Congress has threatened to retaliate by imposing a ban on flights to New York by Concorde. Concorde has enjoyed a waiver from international noise standards for two decades. But the move has prompted furious protests from British Airways. "It is grossly unfair and wrong to take reprisal action against innocent airlines and their customers because of legislation which is being brought in by the EU," said British Airways spokesman Andre Clodong. (European Voice for April 1999). Sir Colin Marshall, chairman of British Airways, is also chairman of Britain in Europe. This group is a strong advocate for abolishing the pound and submerging Britain into a federal Europe - Ed.
The US may ask the International Civil Aviation Organisation (ICAO) to revoke the voting rights of the 15 member states of the European Union if agreement is not reached next week at the US-EU summit in a long-running dispute over aircraft noise. David Aaron, deputy Commerce secretary, yesterday said that the US aviation industry has lost $2bn as a result of an EU law banning the use of noise mufflers, or "hushkits", to curb aircraft noise on older US-made aircraft. Most of the industry's losses have been incurred by Northwest Airlines and United Parcel Service, which often sell their older aircraft secondhand to developing countries, and Pratt & Whitney, which manufactures the hushkits. Although the EU has delayed implementing the ban for a year, until next May, the threat of the ban has "chilled" the market for hushkitted aircraft, Commerce officials say. Mr Aaron said the EU has been told by ICAO officials that its hushkits ban is not consistent with its obligation to abide by joint and multilateral standards. The unilateral EU standard is not imposed on the basis of noise but on the basis of design, he said. "Aviation is the quintessential global industry," he said. If every country imposed unilateral standards, there would be chaos. The US is set to implement multilateral noise standards already agreed by ICAO next year. The EU will not be putting the ICAO standards into effect until 2002 and if it really wanted to reduce noise, the EU could implement the standard earlier, Mr Aaron suggested. (D Telegraph 10/12/99)
The EU took unilateral action this week to ban "hush-kits" on aircraft serving European routes after May 2002. Banning hush-kits sets an ominous precedent. If countries are permitted to regulate design as opposed to enforcing performance standards, it will open a Pandora's box of mischief from any party that wants to impose arbitrary rules to discriminate against competitors. Both micromanaging business decisions and over regulating markets reduce economic performance. (FT 12/5/00)
The EU has imposed anti-dumping duties on imports of hardboard from six East European countries. Polish exporters have been hit by the toughest penalties, duties of up to 34.8%. (European Voice 4 February 1999)
The EU has imposed five-year anti-dumping duties on imports of bicycles from Taiwan. The commission has also imposed provisional anti-dumping duties on imports of steel ribs and cables from seven countries including China, Hungary, India, Mexico, Poland, South Africa and Ukraine. (European Voice 25 February 1999)
Australia has launched a campaign against what it describes as backsliding by the European Union in the lead up to World Trade Organisation agricultural trade negotiations. The Agenda 2000 reform package damaged prospects for further reform in Europe. There is now likely to be further intervention and a renewed build-up of unwanted surpluses, which will continue to be off loaded onto world markets. (Financial Times 21 April 1999)
The EU Commission is highly protectionist and prefers use extremely high tariff barriers to protect inefficient and high cost local industries. The EC does not use the recognised dumping criteria of selling a product below cost. The formula used by the EC guarantees that a foreign product will always qualify for anti-dumping action. The EC works out an "average" price charged in the EU market by deliberately disregarding the highest price. This means the "average" EU price is always below the home market price so anti-dumping penalties are thereby justified. (BBC R4 File on Four 1/7/98). Below cost sales in the home market are ignored by the Commission because it claims they were not in the ordinary course of trade. It claims that the highest prices charged in export markets are merely an artificial front to hide dumping. In the case of grey cotton, when the commodity price fell by 36% and that of unbleached cotton fell with it, the Commission used this fall to argue that the fabric was being dumped. Three quarters of the so-called anti-dumping cases brought in the EU are successful. A study of EU anti-dumping cases in the last 18 years showed that only 2% were possible candidates for a closer examination of possible predatory behaviour. Claims against anti-dumping have included louvre doors and onion rings in batter. Anti dumping, particularly against central European and Asian countries, has become part of corporate strategy by large companies. It is used by powerful domestic interests to stifle foreign competition; it is hardly consumer friendly. (European 20/7/98)
Anti-dumping decisions may be becoming political and therefore unpredictable. It is suspected that Italy changed sides in a recent vote on duties on personal FAX machines - of which Austria is the main EU producer - in attempt to win Austrian support on grey cotton. (FT 28/7/98)
The Japanese are to be investigated for evading anti-dumping duties on television cameras by exporting them in kit form. Duties could be imposed on the kits. (European Voice 11/7/98)
Ministers have approved anti-dumping duties of 33% on imports of tungsten carbide and fused tungsten carbide from China. They decided to re-impose the levies after concluding that EU industry would be harmed if they were allowed to lapse. (European Voice 16/4/98) Heavy duties are to be announced on Chinese exports of magnesium. (European Voice 23/4/98)
When Sweden joined the EU in 1995 anti-dumping duties were imposed immediately on 151 products. Sweden had not used anti-dumping duties before accession. Anti-dumping cases keep 200 EC officials in full-time employment. Anti-dumping duties are the rich man’s means of keeping the poor man’s products out of his market. The victims of EU anti-dumping measures have been responding in kind so the Commission complained that they do not stick to WTO rules. (European Voice 2/4/98)
In January 2002 national currencies are phased out and the Euro-currency will enter circulation. It is also the time when Wim Duisenberg is expected to step down from the ECB in favour of Frenchman J-C Trichet. It is the French Presidential and Parliamentary election year and France introduces the 35 hour week. This is the crucial year in which the French believe they can shield Europe from the pressure of globalisation. All the key elements will be in place for a coherent protectionist labour market policy across the EU. German unions aspire to a 32-hour week and there are similar plans in Italy and Greece. This policy is expected to produce a reduction in mass unemployment. Europe’s leaders seem to calculate that the need for labour market flexibility can be forestalled by widespread use of protectionist measures. (The European 11/5/98)
Britain's luggage industry has declared war on the EC over the anti-dumping duties on Chinese-made luggage. It could put at risk thousands of UK jobs. The British Luggage and Leathergoods Association which represents a mixture of traders and manufacturers says the anti-dumping investigation is misconceived and would stifle imports which enlarge consumer choice. (FT27/11/96) Hong Kong manufacturers say they are commercial organisations operating in a free economy and are not selling below cost. Italy will suffer from EU protectionism because it exports US$1.6bn worth of leather to Hong Kong. (FT 7/3/97). Chinese handbags are only a small proportion of sales and have not prevented European producers from raising production and exports. Littlestone & Goodwin, the UK's largest handbag maker sacked 54 staff and closed its factory because of the new import duty will destroy the most profitable part of its business, importing. (FT 28/7/97)
Import duty of up to 89% has been imposed on fax machines from seven Asian countries. It is extremely improbable that all seven are exporting below home market prices. The EU Commission imposed the duty against the wishes of a majority of member states. Asian FAX exporters are to call for WTO action against the EU over the duties imposed against supposed dumping. They claim the EC massaged the figures to support their claim of dumping. The EC rejected the figures given by the countries making the machines. The action was based on just one complaint by Philips. The other main EU producer Sagem had few concerns over Asian imports. (European Voice 9/4/98).
The Commission has started an investigation into alleged dumping of laser-optical reading systems by five Asian countries. Again, five member states opposed the investigation that was started at the request of Blaupunkt and Phillips with support from Grundig. The outcome is likely to be a punitive tariff. (FT 29/10/97). Anti-dumping duties will not be levied. (E Voice 30/7/98)
The EU has imposed anti-dumping duties on steel tube and pipe products from six east European countries. Duties range from 7.5% to 38.2%. (FT 18/11/97).
The EU has imposed anti-dumping duties on steel tube and pipe products from six east European countries. Duties range from 7.5% to 38.2%. (FT 18/11/97). Again, it is inconceivable that so many countries would conspire to sell below their market price to the EU-Ed.
An Indian exporter of luxury housewares is complaining to Brussels after being hit by controversial anti-dumping duties on bed linen. Shades of India sells to Harrods, Liberty and Le Bon Marche in Paris. It produced a specially crafted range for Cartier. It has been hit with a 24.7% duty when the EU ministers decided to impose anti-dumping duties in bed linen. Shades has tried in vain to apply for individual treatment. In no way is it dumping its high value products. (FT 13/2/98) The European Union has suspended anti-dumping duties on bed linen against India, claiming that bed linen is being exported too cheaply, after losing a World Trade Organisation (WTO) case against India. "Whilst mindful of the concerns of the EU industry, our swift action to bring ourselves into line with the panel decision on bed linen from India is a tangible demonstration of the importance the EU attaches to compliance with WTO rulings, whether we win or lose," said EU Trade Commissioner Pascal Lamy. The WTO ruled that the EU broke the trade rules when it imposed import duties on Indian bed linen in December 1997. According to the BBC, WTO said that the EU failed to consider "constructive remedies" before the duties were imposed and did not evaluate "all relevant economic factors" in assessing the impact on domestic producers. The EU imports about 3.6 billion euros of Indian textiles in a year. (EUobserver.com 16.08.2001)
The EU import duty on unfinished cotton cloth is designed to protect the small Portuguese industry. Raising import prices by 42% for European cotton finishers is a disaster, especially because there is no such duty on imported finished goods. The effect will be to export thousands of jobs to Asia where cotton goods can be finished at a far lower price. (Sunday Telegraph 23/2/97). The Commission imposed the duty on a provisional basis, without a vote in the EU anti-dumping committee. Now 9 member states will vote against the measure. The EU is using a measure of dumping which can create dumping margins where none exist, contrary to WTO rules. (FT 17/3/97) Coates have already made 26 people redundant with more to come. Cramlington Textiles employs 600 and is facing short-time and redundancies as a result of the anti-dumping action. (FT 21/3/97). Curtina, makers of curtains, has closed its Rainham factory and sacked 250 staff. It was told by the EC to raise its prices to cover the duty; it cannot, so it now imports finished goods from India. Other finishers found that the EU cotton mills do not produce the right type of product for their finishing machines so they still have to import high priced grey cloth. (BBC R4 File on Four 1/7/98). EU ministers rejected the Commission action so the duty has now been scrapped (FT 22/5/97) pending a further review (FT28/7/97). The Commission persists with its reviews; it has completed its third one and again recommends high import duties of up to 32.5% on products from China, India, Turkey, Pakistan, Egypt and Indonesia. The Commission is applying pressure to impose definitive five-year duties, without the provisional stage, in order to force Ministers into a decision. Again, only a third of EU states backed the Commission's proposals. (FT 6/3/98). The European Commission has imposed provisional anti-dumping duties on imports of unbleached cotton from 6 Asian countries for the second time in two years, in defiance of opposition from the majority of European Union states. The Commission decided to impose duties without discussion. Brussels can impose provisional duties for six months without a vote by EU ministers. The British Apparel and Textile Federation called the move incomprehensible. The Indian Mission to the EU said the measures would cause cause severe damage to India's biggest industry. Indian exports of grey cotton to the EU were halved when duties were enforced last year. (FT 26 March 1998) The President of the Board of Trade, Mrs Margaret Beckett, said the provisional anti-dumping duty was against the wishes of a clear majority of member states. (Hansard 27/4/98). The duties put 200,000 UK clothing and textile jobs at risk. The Commission brushed aside such concerns and proposed duties averaging 12% and a new minimum price system for exporters. (D Telegraph 30/7/98). EU diplomats voted by a narrow majority to reject EC proposals to re-impose anti-dumping duties on unbleached cotton (European Voice 17/9/98). Ministers confirmed the decision against duties on cotton (FT 6/10/98)
Secret EEC protectionist trade deals are costing consumers billions of pounds. Every car sold will cost about GBP230 more than it should. Similarly CD players, clothes, computer printers, VCRs, etc. are overpriced. (National Consumer Council, Independent 6/5/93).
Although the EU itself is protectionist and is quick to move against so-called anti-dumping it is happy to dump its own produce on other countries. The EU is dumping apples at below cost in the Czech Republic (BBC 2 TV Money Programme 8/3/98). The Czechs responded to the decimation of their own apple industry by imposing quotas. European ministers then agreed to suspend preferential import tariffs on pigmeat, poultry and fruit juice from the Czech Republic in retaliation against Czech restrictions on EU apple imports. They also made provision for the EC to extend the measures to dairy products. The EU measures, approved by transport ministers in Brussels, are expected to come into force on April I. (FT 18 March 1998). ). The Czech Republic backed down and agreed to withdraw quotas on imports of EU apples. An agreement to recognise each country’s hygiene inspection rules for meat and meat products was to be signed. EU assistance to help the Czechs improve apple marketing would be restored once the quotas were withdrawn. (FT 5/5/98)
The EU imposed a high import barrier to protect eight European pig-iron producers from imports from Brazil and eastern Europe. The levy is in the form of a minimum price so all the foreign producers have to do is raise their prices to the EU level meaning they will make an extra profit of £250m a year at the expense of the 3,500 European iron foundries. (Eurofacts 7/3/97). An EC spokesman asserted that it was correct to protect 393 pig iron producer's jobs while putting at risk 100,000 foundry workers. The levy failed to protect the local producers and only one viable business remains. The EC has withdrawn the levy. (BBC R4 File on Four 1/7/98)