On 14 September 2007, in a move that agitated both the environmental lobby and businesses with interests in China, the EU Member States decided to extend, by 12 months, the anti-dumping duties on energy efficient light bulbs from China. The Anti-dumping Committee (which is composed of the Member States’ trade representatives) convened an extraordinary meeting to consider the Commission’s proposal to terminate measures, albeit with one year’s extension. The proposal was not opposed by a majority of the Member States and on 15 October was endorsed by EU Ministers.
Since February 2001, the EU has imposed anti-dumping duties of up to 66.1% on integrated electronic florescent lamps (CFL-i) from China. Anti-dumping duties are usually applied for five years, unless they are prolonged following an expiry review. As a result of such a review in 2006, the Commission concluded that it would not be in the EU’s interest for duties to be renewed, on the basis of environmental concerns as well as the fact that duties would have a detrimental impact on consumers, who have to pay increased prices because of the duties.
However, instead of proposing to terminate the duties straight away, the Commission was forced to bow to political pressures and had to water down the proposal so that the duties would terminate only in 2008. In fact, this is a very politically sensitive issue as there are divisions not only between Member States, but also between EU Commissioners. Germany – who, rather ironically, are normally a staunch protector of the environment – had not supported the termination of the duties due to intense lobbying fromOsram(a subsidiary of Siemens). At the Commission level, Trade Commissioner Peter Mandelson who wanted the duties terminated was pitted against Gunter Verheugen, the Commissioner for Enterprise and Industry, who claimed that any termination would lead to job losses in the EU (as the European industry would be subject to below cost imports from China).
Free-trade supporters and environmentalists alike were quick to deride the decision to extend the duties. British MEP Syed Kamall accused the Commission of putting the “the interests of one producer ahead of the entire light bulb industry”. In fact, the dispute focused attention on how exactly the interests of EU industry should be defined when so much production is being outsourced to China. Osram, which manufactures fewer light bulbs in China than Dutch rival Philips, had objected to the latter’s right to be considered an EU producer for such a case because of the significant volume of Philips’ products produced in China.
From the environmental perspective, the World Wildlife Fund (WWF) considered the Commission proposal disappointing, protectionist and a severe contradiction with the ambitious EU targets to stem climate change by improving energy efficiency by at least 20% before the end of 2020.
Although there is theoretically nothing to stop Osram, or any other affected company asking for a further review to extend the duties past 2008, in view of the controversy surrounding the issue and the unlikelihood that market conditions will change significantly in the near future, any further extension seems an extremely slim possibility.