EU Commission backs compromise in China bulb row

BRUSSELS, Aug 29 (Reuters) The European Commission opted for a compromise to end a trade row over energy-saving lightbulbs from China today, proposing a one-year delay before scrapping anti-dumping duties on the imports.

In a case seen as a test of the European Union's openness to imports from Asia, and of its commitment to protect the environment, the bloc's trade chief Peter Mandelson had pushed for the duties to be axed immediately.

He was backed by European firms, led by Dutch electronics group Philips, which import large amounts of Chinese lightbulbs.

The duties add up to 66 per cent to the price of the bulbs and environmentalists say they fly in the face of the EU's claim to lead the fight against climate change.

But Mandelson ran into opposition from Germany and its EU Enterprise Commissioner Guenter Verheugen who expressed concern that eliminating the duties would cost jobs at Osram, which is part of Germany's Siemens group.

Osram says it is the biggest manufacturer of energy-saving bulbs in Europe and it imports fewer from China than Philips.

The one-year duties extension plan hammered out by the EU Commission today is shorter than the usual five-year period for anti-dumping measures that was originally sought by Germany. The duties were introduced in 2001.

The proposal now goes to EU member states for approval.

Philips said it was unhappy with the proposal to continue the duties, which cost the group up to 20 million euros a year. Osram said it appreciated its arguments about free trade and competition had been acknowledged by the EU.

The case again highlights the tensions within the 27-nation bloc between companies wanting cheap imports and those that say they are being hurt by unfair trade practices.

European Commission spokesman Johannes Laitenberger said the one-year extension of the duties would allow ''a soft transition'' for the European industry.

But the proposal was lambasted by the environmental group WWF as a ''severe contradiction'' in EU policies, chief among them a target for 20 percent energy savings by 2020 and a plan to switch homes and business to energy-savings lighting.

''On the one hand, Europe has committed to an ambitious energy efficiency objective and on the other hand it continues to impose taxes on imports of green products,'' WWF trade advisor Eivind Hoff said.

Trade experts say the lightbulbs issue is a test case because Mandelson gave more weight than in the past to interests of EU companies that produce or source goods in China.

The market for energy-saving bulbs in the EU was worth 376 million euros in the 12 months to June 2006, and China accounted for about 70 percent of sales, according to Commission figures.

Reuters SY GC2106