Swedish trade official opposes to EU probe into Huawei, ZTE

A senior trade official of Sweden had voiced opposition to the European Commission's proposal to launch an investigation into Chinese telecoms equipment makers Huawei and ZTE.

Gunnar Oom, state secretary to Swedish Minister for Trade Ewa Bjorling, was speaking to Xinhua days after a majority of European Union (EU) countries had reportedly refused to support the Commission's plan in a meeting in Dublin.

Expressing doubts about the effectiveness of anti-dumping measures, Oom said, "From a more intellectual and scientific point of view, we don't think measures of this kind should be introduced, and this is our general stand point."

The European Commission has been collecting evidence since last year to prepare a possible case against the two Chinese companies over alleged "unfair" state subsidies, even without receiving any complaint from an EU company.

Huawei and ZTE's major competitors in Europe, such as Sweden-based Ericsson, the world's leading telecoms equipment maker, also don't like the proposed investigation, according to Oom.

While admitting that imposing anti-dumping duties might be a counter-measure against unfair trade practice, the Swedish official said, "Then, if you think a little bit more, these measures are meaningless."

Oom is sceptical of such measures also because some politicians in Europe "like to use these penalizing measures to demonstrate their management skills in a populist way."

Oom said EU-China economic and trade relations as a whole are also at stake. The EU is China's biggest trading partner, while for the EU, China is second only to the United States.

The Commission is investigating 30 anti-dumping or anti-subsidy cases, 19 of which involve China. Last year it launched its largest probe ever, into the alleged dumping of, and subsidies for, an annual 21 billion euros (about 27 billion U.S. dollars) of solar panels that China exports to the EU.

If the Commission launched the investigation and decided to impose the anti-dumping duties, the trade relations between China and the EU would be negatively affected and might even result in a trade war, the Swedish official said.

Oom said his opposition to anti-dumping measures in principle was based on a study by the Swedish National Board of Trade, entitled "Do EU Producers and the EU Economy Really Benefit from Anti-Dumping Policy?"

The report, which examines the effectiveness and efficiency of EU anti-dumping measures, of which China is by far the top target, found that EU anti-dumping measures do provide some protection for EU producers, but the protection is moderate.

The study shows that the protected sector gains, on average, only one percentage point of the EU market share after the measures have taken force.

However, it is third countries which are not subjected to anti-dumping duties that benefit the most. The study found that producers in third countries gain, on average, as much as 8 percentage points of the EU market share.

Furthermore, the anti-dumping protection comes at a rather high price for users and consumers in the EU.

Users and consumers in the EU pay significantly higher prices on purchases from EU producers (10 percent) and on imports from non-targeted countries (5 percent) and targeted countries (28 percent plus 30 percent duty, on average).

The calculations suggest that, with every one euro gained in the protected sector, users and consumers pay, on average, 4.5 euros in higher prices and tariffs. (1 euro = 1.30 U.S. dollars)