Law firm urges stop to manufacturing job exports

British and European manufacturers are being urged to evaluate the use of EU trade rules to stop factories and jobs being exported to countries such as China and India.

British manufacturers and their European counterparts are being urged to evaluate the use of EU trade rules to stop factories and jobs being exported to countries such as China and India in the wake of low-priced imports flooding the UK and European markets.

Law firm King and Spalding International says that many UK and European businesses are unaware of laws and regulations available to remedy the damaging and irreversible effects of surging imports, especially of low-priced or dumped manufacturing and agricultural goods.

"It is clear that free trade between nations has proved enormously beneficial to economies around the world, creating prosperity, employment and improved quality of life", said Steve Orava, partner at King and Spalding in London.

"However, free trade also has local consequences in terms of greater competitive pressure on local manufacturers and farmers from increased imports and unfair trade.

For this reason, laws and regulations exist to help protect local businesses and their employees from the effects of surging imports." "Firms in other nations, particularly those in the fastest growing economies, have proved far more savvy in their use of these laws and regulations.

At a time when China, India, and countries in Southeast Asia are substantially increasing their exports to the UK and Europe, they are also initiating many more anti-dumping and safeguard cases than their western counterparts." Through the European Union, the UK and other EU Member States have signed up to "trade remedy" rules under the auspices of the World Trade Organisation (WTO).

Under certain circumstances, these rules give the European Commission the right to redress the damaging consequences of surging imports, particularly dumped and subsidised imports.

These remedial measures are both transparent and legally justified and are far preferable to the opaque and arbitrary protectionist measures that have historically been the response to the adverse local impact of increased imports and unfair trade.

Orava continued: "Countries only have a few WTO-consistent measures available to limit the impact of imports on their manufacturers and workers.

Not only are UK and European manufacturers and farmers not using these measures to their full effect, many industry and agricultural sectors are unaware that they exist at all".

He continued: "Consumers in the UK, and the EU generally, have long recognised the need to limit the effects of globalisation through measures to protect human health, the environment, cultural diversity, and the countryside.

It is a logical conclusion that such consumers would also support the preservation of local manufacturing for the benefit of the economy and workers in the community." Two specific examples highlight the need to foster a debate on these issues.

First, in the European furniture industry, many small and medium sized firms are under severe pressure or have abandoned operations altogether as a result of surges in imports.

EU imports of wooden bedroom furniture from China, for example, have increased 282 percent from 1999 to 2002.

Second, the number of UK apple growers has declined from 1,500 in 1987 to 500 in 2003, likely as a result of significant increases in imports of apples and apple juice.

For example, EU imports of apple juice from China have increased by 461 percent from 1999 to 2002.

Other products are similarly under threat, including hand tools, packaging materials, chemical products, textiles and clothing, and a wide range of agricultural goods.

Developing countries are now much more prolific users of trade remedy measures.

Between 1995 to 2002, anti-dumping measures increased by only 11 percent for developed countries compared to 276 percent for developing countries.

For the same period, initiations of new anti-dumping cases by developing countries increased 166 percent, while they declined by 2 percent for their developed counterparts.

Many of the same countries that are the source of low-priced imports in the UK and EU markets are also the most active users of trade remedies to protect their own markets.

In the first six months of 2003, for example, China imposed 11 anti dumping measures, compared to the United States who imposed 3 and the EU just 1.

China also announced the establishment of an anti-dumping early warning system to monitor imports for purposes of future anti-dumping proceedings.

King and Spalding is currently representing a wide range of US industries and their employees in legal actions to combat low-priced imports that are causing serious injury to US manufacturing and employment.

For example, the firm filed an anti-dumping complaint in late 2003 on behalf of certain US furniture manufacturers and their workers that are being injured by low-priced furniture flooding the US market from China.

It also has experience in addressing injurious imports on behalf of the US chemical, packaging, cement, steel, cookware, and agriculture industries and their workers and in filing complaints in other countries (e.g, Guatemala, Nicaragua, Philippines) on behalf of their local industries and workers.

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