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By Philippe Legrain ADD COMMENTS

Peter Mandelson, the EU’s trade commissioner, has announced a review of anti-dumping measures. These seek to protect Europeans from imports that the Commission deems unfairly cheap. Personally, I think low-cost foreign products are one of the boons of globalisation – allowing the pound in your pocket to stretch further – as well as being particularly pro-poor, since the dirt-cheap basic goods that the likes of China produce allow poorer people to enjoy a much higher standard of living. Unfortunately, Mandelson is not questioning the flawed protectionist premise behind anti-dumping duties. He just wants to mitigate the harm they do to European companies with investments abroad.

He has a point. Anti-dumping measures are not only bad for European consumers; they are also increasingly damaging to European companies. The likes of Adidas, for example, make most of their shoes in Asia, so when the EU seeks to protect Italian shoe-makers from competition from cheap Asian footwear, it also hurts the German sportswear company. Anti-dumping duties also hit European retailers that source their stock in affected countries. In fact, the biggest beneficiaries of the EU’s anti-dumping measures against China are often China’s higher-cost competitors in South-East Asia rather than much-higher-cost manufacturers in, say, Italy.

The Commission is today holding hearings (behind closed doors) on the anti-dumping duties imposed on shoes made in China and Vietnam ahead of Mandelson’s trip to China next week. It is surely too much to hope that the EU will finally see sense and consign its absurd battle against cheap imports to the dustbin of history.

Posted 02 Jun 2006 in Blog, Europe, Trade

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