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China urges Temer government on anti-dumping probe
July 16, 2016, 2:11 pm

China has risen to become Brazil's biggest export market [Xinhua]

China has risen to become Brazil’s biggest export market [Xinhua]

China has urged the Michel Temer government in Brazil to stop using the controversial ‘Surrogate Country’ approach in its anti-dumping investigation into Chinese high-carbon steel wire.

The Chinese Ministry of Commerce said in a statement on Friday that Brazil planned to use the United States as an analogue country for a benchmark review to evaluate this Chinese steel export.

When the Surrogate Country approach is in effect, a third country or region’s prices can be used to assess if a given country is exporting below market value or dumping.

However, in accordance with the accession protocol signed when China joined the World Trade Organization in 2001, the Surrogate Country approach expires on December 11, 2016, the Chinese Commerce Ministry said.

A recent Bloomberg report says Brazil’s embattled steel industry is on a charm offensive with US officials.

A worldwide steel glut has become a major trade irritant, with China under fire from global rivals who say it is dumping cheap exports.

Frequent use of protectionist practices will not help solve global steel sector woes amid the economic slowdown, and Brazil should refrain from these trade remedy measures, according to the Chinese ministry’s statement.

It said China and Brazil, as BRICs members, should enhance communication and collaborate with each other to create a favorable environment for mutual benefit.

Relations between Brazil and China had thrived under the previous Brazilian administration of Dilma Rousseff with China quickly rising to become Brazil’s biggest export market.

Brazil’s foreign trade department Secex on Monday said it has opened an antidumping investigation into high-carbon PC steel wire imported from China.

The petition was requested by Brazilian steel wire producer Belgo Bekaert, a joint venture of steelmakers ArcelorMittal and N.V. Bekaert.

By far the world’s largest steel producer, China plans to eliminate 100-150 million tonnes of annual production – more than the U.S. produces per year – over the next five years. The cabinet said central government-controlled firms will cut steel and coal production capacity by a tenth in 2016-17.

In May this year, the United States said it would impose duties of more than 500 percent on Chinese cold-rolled flat steel, widely used for car body panels, appliances and in construction.

The Brazilian Foreign Ministry’s Secretary General Marcos Galvão had discussed trade and business with top representatives of the US-Brazil Business Council last month.

According to a WTO report, India, US and Brazil were the leading initiators of anti-dumping investigations in 2015.

Since Michel Temer became interim President of Brazil, his new centre-right administration is attempting to rein in the government’s budget deficit and restore market confidence in Brazil, which has seen its sovereign debt rating downgraded to junk status over the past year.

Brazil’s new foreign minister José Serra has signalled that Brazil’s alliances with leftwing Latin American nations, such as Venezuela, Bolivia and Ecuador will soon be a thing of the past when he said diplomacy would reflect the interest of the Brazilian economy rather than the “ideological preferences of a political party and its foreign allies”.

TBP and Agencies