EU SET TO KEEP EXTRA DUTIES ON ENERGY-SAVING LIGHT BULBS FROM CHINA

A divided European Commission decided last week to retain heavy anti-dumping duties on energy-saving light bulbs from China for an additional year, angering environmental groups who argue that the move will impede efforts to curb climate change.

The EU's executive body on 29 August announced that it would urge member states to remove the extra tariffs in 2008, effectively backing down from plans to eliminate them this year. Governments are set to vote on the proposal during the next week.

Brussels has imposed the duties of up to 66 percent since 2001, claiming that "state intervention or other market distortions" meant that the Chinese bulbs were being sold in the EU "at less than their real value."

EU consumers might have been grateful for cut-rate light bulbs, and the Commission argued that it was in member states' interest to end the duties - not least to cut energy use and greenhouse gas emissions. Nevertheless, European manufacturers seeking more time to adjust to Chinese competition won a reprieve.

Eivind Hoff, a trade and investment advisor for environmental group WWF, described the EU's move as "narrowly protectionist." Pointing to a "severe contradiction" between Brussels' energy efficiency objectives and the prolongation of the extra taxes, he said that it sent "a regressive message to developing country producers that they will be excluded from markets for cleaner products created by the higher environmental standards expected by European consumers."

WWF estimates that a rapid switch from traditional incandescent bulbs to more efficient lamps could reduce EU greenhouse gas emissions by 0.5 percent. The Commission acknowledges that domestic production can account for only a quarter of the EU's demand for energy-efficient light bulbs.

The four European companies that manufacture such bulbs were split on the issue, based largely on how much they have invested in China. Osram, a German company that produces many bulbs in the EU itself, was the only one to lobby heavily for the extension of the duties, reports Associated Press. Dutch multinational Philips, which manufactures many bulbs in China, pushed for scrapping them. EU Trade Commissioner Peter Mandelson said that the case illustrated "the complexities of managing anti-dumping rules in a global economy and against the broad range of EU interests."

Duties notwithstanding, the EU has been a vocal proponent of liberalising trade in environmental goods as part of the Doha Round WTO talks.

ICTSD reporting; "Europe to keep tariffs on light bulbs," INTERNATIONAL HERALD TRIBUNE, 29 August 2007; "EU won't lift charges on Chinese energy-saving light bulbs for another year," ASSOCIATED PRESS, 29 August 2007; "Towards a Low Carbon Future: The Case for China and EU Collaboration," THE WORLD TODAY, October 2007 (forthcoming).