A split inside the European Commission led Mandelson to abandon proposals to end the duties of up to 66 percent this year in favor of a pledge to scrap the tariffs in 2008.
With European imports from China growing steadily, the dispute has become a part of the broader discussion about the impact of globalization and of the extent to which the 27-country European Union should use defensive trade measures.
But it also has repercussions for the EU's push to tackle climate change since the bloc wants to phase out the use of common incandescent light bulbs for domestic use within two years. European production can meet only 25 percent of demand for energy-saving bulbs, the commission estimates.
A senior European official, speaking on condition of anonymity, characterized the outcome as a compromise that averted a deep split with the commission, gave a clear decision to lift the duties but provided flexibility on timing.
After the hourlong discussion among the commissioners, Mandelson said: "The European Commission will recommend to member states that it is in the interest of the EU to remove these duties in the next year. This case has once again shown the complexities of managing anti-dumping rules in a global economy and against the broad range of EU interests."
The EU imposed the duties in 2001 and the 27 member countries must decide by mid-October whether to accept the commission's recommendation. At a meeting in July, Mandelson persuaded enough experts from EU member states to back a lifting of duties this autumn - despite German-led opposition.
Osram, a lighting manufacturer based in Germany, had called for the duties to remain in place.
The dispute has focused attention on the broader question of how to define the interests of European industry when so much production is being outsourced to China.
Osram, which produces fewer light bulbs in China than Philips of the Netherlands, had challenged the right of its rival to be considered as a European producer for such an anti-dumping case because of the quantity of its products manufactured in China.
That issue was not addressed by the decision Wednesday. But the commission is reviewing its trade defense strategy and drawing up a policy designed to deal with the complex issues raised by outsourcing of manufacturing to China.
Osram welcomed the announcement Wednesday, while Philips said it was disappointed that the termination of duties would delayed for a year.
The Foreign Trade Association, an umbrella group of European retailers and importers, said it was concerned that the light bulb tariffs might not be automatically lifted next year, even if the commission proposal is endorsed by EU countries.
"There is no guarantee that a further extension will not take place," said Stuart Newman, legal adviser to the association, who added that Osram or other companies might make further complaints next year that would have to be investigated.
Newman described the outcome as a "minor setback for Mandelson's support for free trade" and said the trade commissioner had faced internal opposition from Günter Verheugen, a German, who is the commissioner for industry. Verheugen previously supported a two-year extension of the duties.
"I understand there was political pressure from Verheugen and Barroso," Newman said, referring to José Manuel Barroso, president of the commission.
Osram said that the company "appreciates that our arguments regarding free trade and fair competition are being acknowledged by the European Union in the consultation."
Lourdes Catrain, a lawyer for Philips, estimated that the continuation of duties for a further year would cost the company €15 million to €20 million, or $20.5 million to $27.3 million.
Craig Burchell, head of international trade for Philips, said: "We acknowledge the fact that the commission has listened to Philips's arguments and decided to propose termination of the tariffs. But we are disappointed that they have not been terminated immediately because that is what the case merited.
"Free trade is about providing consumers with access and supplying the demand of European consumers," Burchell said. "In that sense the consumer has not won from this decision."
Johannes Laitenberger, chief spokesman for Barroso, said it was "a balanced decision following a proposal by the trade commissioner."
Laitenberger added, "The president's commitment to free, open and fair trade is well known." Ton van Lierop, spokesman for Verheugen, said the industry commissioner "thinks it is a good solution and is very satisfied."
Via: International Herald Tribune
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