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WTO supports China in trade dispute with EU

China may demand sanctions after winning an appeal to the World Trade Organisation (WTO) over European Union anti-dumping measures imposed on China's fastener industry in 2009.21 Jan 2016

The EU measures have affected Chinese exports of screws, nuts and bolts made of iron or steel for seven years, state owned news agency Xinhua said.

The WTO said that the European Union had defined the domestic fastener industry incorrectly, leading it to wrongly assess production levels in the EU.

The EU had also used an Indian company, Pooja Forge, as 'proxy' for Chinese prices, "to determine the normal values on the basis of prices of fasteners sold in an appropriate surrogate country", the WTO said. This is because China is not considered to be a "market economy" under WTO rules and therefore its prices do not need to be taken at face value.

However China queried how this price comparison had been made, claiming that product types were not comparable, the WTO said.

Following the WTO ruling, the Chinese ministry of commerce said the anti-dumping measures had affected $1 billion worth of Chinese exports and more than 100,000 jobs in China, resulting in huge economic losses to the industry, Xinhua said.

The ministry asked the EU to respect the latest ruling, "or China reserves the rights to take further action under the WTO framework", Xinhua said.

The value of Chinese exports of fasteners to the EU fell from over $1 billion in 2008 to around $200 million after the EU imposed tariffs in 2009, according to a Reuters analysis of data.

China is currently pushing for market economy status under WTO rules, sources told the Financial Times in September.