Move will close market to 1,000 tile exporters, according to expert

BEIJING - The new import tariffs imposed by the European Union (EU) on ceramic tiles made in China will keep more than 1,000 Chinese exporters out of the European market, an expert said.

The EU placed the import tariffs on the tiles on Thursday, and Chinese exporters of bathroom, kitchen and paving tiles will face anti-dumping duties ranging from 26.3 to 69.7 percent at European borders, Reuters reported.

"The EU's move will greatly affect China's tile industry. With the introduction of a maximum tariff of 69.7 percent, more than 1,000 Chinese exporters will lose the EU market. The exception is the 121 tile makers who will pay the normal tax rate," said Guo Cheng, vice-director of the information department of China Ceramics Industrial Association (CCIA).

The EU initiated an anti-dumping investigation of Chinese-made ceramic tiles in June, 2010. The investigation, involved exports worth $310 million and more than 1,400 exporters mainly from South China's Guangdong province.

In its preliminary verdict published on March 17, the EU imposed provisional anti-dumping duties as high as 73 percent on most of China's tile exporters.

Appeals from Chinese enterprises and industrial associations reduced the five-year punitive duties to between 26.3 percent and 69.7 percent, according to Guo.

"We will take our chances with a Sunset Review in the coming years to protect the domestic tile industry," Guo said.

A Sunset Review is a review of anti-dumping verdicts after the exported product has been taxed for five years to decide whether to extend or stop the tariff.

Guo also said the CCIA is planning to examine whether the EU is dumping medium- and high-quality tiles in China under world trade rules.

The European debt crisis, which slammed the continent's real estate industry, and the increasing costs faced by the European tile industry, reduced the sales of European tile makers.

"China's tile exports to European markets have increased by only 1 percent since the European debt crisis, while the sales of European tile producers dropped by more than 40 percent.

The debt crisis and the growing cost of fuel, power and transportation are responsible for the EU's shrinking tile industry," Lan Weibing, a director of the CCIA, told the industry portal www.ceramicschina.com.

Guo said that the EU's punitive tariff is "closely related to trade protectionism, and it was levied to reduce the pressure on European tile makers troubled by increasing unemployment and factory bankruptcies".

On June 30, 2010, the European Commission launched investigations on anti-dumping and safeguard measures against Chinese-made wireless wide area networking modems and subsequently launched an anti-subsidy investigation against the product on Sept 16, 2010.

The investigation, involving Chinese exports of modems worth $4.1 billion, is the biggest trade remedy case with regard to the export amount.