They were particularly angered at the EU decision that two Chinese units of two European companies, namely Italy's Agrati and Spain's Celo which were behind the complaint, will be exempted from the duties.

"EU granted special treatment to EU invested companies in China, which is totally unfair to Chinese producers," Zhang said.

In the context of the financial crisis and a looming recession in Europe, MacLean said he could not see the reason behind the duties.

"We are wondering why they are doing it because the European industry needs raw materials to produce cost-effective goods for consumers," he said. "We do not understand why some industries are asking for financial help, the Commission is penalizing them by having extra costs on to their production."

The European car industry, a heavy user of fasteners, is demanding funding support from the EU and some member states.

"If you have financial crisis, the last thing you want to do is to increase production cost for your industries," MacLean said.

WTO suit encouraged

Believing the EU's imminent decision is fundamentally flawed, Zhang said his association had requested the Chinese government to appeal to the World Trade Organization (WTO) on the EU's abuse of anti-dumping norms.

In a counter-attack, the Chinese companies are also gathering information to request the Chinese authority to launch an anti-dumping investigation against the subsidiaries of Agrati and Celo for their unfair commercial behavior by taking advantage of the EU's anti-dumping proceedings to eliminate competitors in the market.

"We just got news that Beijing is preparing for appealing to the WTO on this case and starts to investigate Agrati and Celo seeking their own interests by taking advantage of its status of European company subsidiaries," Zhang said.

A trade official in the Chinese mission to the EU declined to confirm the report as the EU has not made a formal decision.

MacLean said the case would be important because it represents a series of similar cases against Chinese products.

Only a week ago, the EU imposed interim duties on Chinese-made candles and non-alloy steel products. So far, a number of Chinese steel products, including certain hot-dipped metallic-coated iron or steel flat-rolled products and stainless steel cold rolled flat products, have been under EU investigation for dumping claims.

MacLean said the Chinese government should take a tough line in the fastener case in order to prevent a domino effect, adding there is a good chance for China to win if Beijing decides to go to the WTO.

Analysts say the fastener case is a test for the newly-appointed EU Trade Commissioner Catherine Ashton, who warned recently nations should refrain from protectionist measures in the face of the financial crisis which is dampening world economic growth.

It is predicted that EU member states will again run into division on the issue when they vote Wednesday, MacLean said.

(Xinhua News Agency November 25, 2008)