*** modified Tuesday 16 June 08h00 pm ***
The European Commission's decision to impose a definitive countervailing duty on imports of certain glass fibre fabrics from China and Egypt, published on Monday 15 June, is historic. It penalises Chinese subsidies for manufacturing products abroad.
Considering that the support from the Chinese authorities was not limited to companies established on its territory, the Commission decided to investigate the production from these companies in Egypt (see EUROPE 12462/25). After an unprecedented investigation, the institution therefore made a decision. By imposing countervailing tariff duties of between 10.9% and 30.7% on imports of woven and/or sewn glass fibre fabrics, it penalises, for the first time, subsidies granted by a country to its companies for the manufacture of products abroad.
"The Commission has therefore recognised the possibility of attributing sovereign acts of the Chinese government to the Egyptian government", said Anna Dias of the Gide law firm in Brussels.
In this case, the targeted companies are located in the China-Egypt-Suez economic and trade cooperation zone. It is a special economic zone, controlled by a Chinese government agency to promote China's outward expansion, Dias told EUROPE.
Companies have received significant subsidies, including through Chinese state-owned banks, under agreements between the Egyptian and Chinese governments.
"This decision is therefore both revolutionary and absolutely necessary to protect European industry effectively against 'new forms' of unfair international competition", Ms Dias welcomed.
The Commission confirms its intention to further investigate third country subsidies which cause unfair economic injury to European companies.
This significant decision comes two days before the publication by the Commission of its White Paper on a level playing field for foreign subsidies, expected on Tuesday 16 June (see EUROPE 12386/10, 12507/1).
See the Commission's investigation: https://bit.ly/2BaQzdv (Original version in French by Hermine Donceel)