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Last Updated: Thursday, 25 May 2006, 23:35 GMT 00:35 UK
'Old Europe' seeks barriers to Asian rivals
By Nigel Cassidy
BBC News business reporter in Bergamo, Northern Italy

Walk along just about any shopping street in 'Old Europe' - I picked Bergamo in Northern Italy - and you can buy plenty of things courtesy of the European Union.

Italian clothes in shop in Bergamo
Textile import quotas have helped some Italian brands survive

Anti-dumping measures are keeping many lower-cost Vietnamese alternatives out of the EU.

Hence, in the long-established corner shoe shop in the old town, for example, there are nice pairs of Italian shoes on offer.

Almost opposite is a clothing store offering stylish European-made tops and trousers, their makers getting a helping hand from those recent, if chaotic, Chinese textile quotas imposed by the European Commission.

Yet, on a clear day, the view down from the old town, across the plains towards Lake Como, is of the area that was once the proud heartland of Italy's world-renowned furniture industries.

Today, only the strongest producers have survived in what is fast becoming a global marketplace for furniture.

Last year, Chinese furniture imports into the European Union (EU) rose 40%.

So through their trade association, Italian and German makers are putting a case together for EU anti-dumping measures to be taken against the Chinese.

But first, they have to find evidence that their overseas competitors are exporting goods more cheaply than they sell them in their home market.

Unfair competition

Among the survivors, there is Poliform, in the Lake Como area, which craft some of the worlds most coveted kitchen, home and office furniture.

Poliform Chief Executive Nino Anzani
Mr Anzani is concerned about intellectual property theft

Their products are the favourites of Footballers' Wives; the slick kitchen used in the house featured on the business reality show was apparently by Poliform.

Still a family firm after more than 60 years, Poliform prides itself on its continued success, in an industry where labour, employment and raw material costs have ground down many of their competitors.

Yet, after a tour of the factory, Chief Executive Nino Anzani says he is still in favour of the industry acting against what he sees as unfair Chinese competition.

"We do accept that it will be a challenge to make a case, but we do think everyone playing in the market should abide by the same rules.

"It is also important that intellectual property should be protected.

"Fortunately our own products are very advanced and extremely hard to copy."

Loss of competitiveness

Poliform knows it is the desirability of its products that will determine success.

The history of subsidies and economic assistance given by governments, both in Italy and elsewhere, suggests that protecting jobs and shielding companies from competitors can only have ever have temporary positive effects.

Bart De Turck, of the European Furniture Manufacturers Federation
Mr De Turck is not convinced the Chinese are guilty

The continued, highly indebted state of the national airline Alitalia is a prime example.

Yet interestingly, there are signs that old Europe is weaning itself off its long addiction to economic protectionism.

It turns out that the trade body representing most other European furniture makers has decided it cannot support the campaign to file anti-dumping complaints in Brussels.

It seems there is now a split with Italy and Germany over just what to do about countering the effects of tough competition from Asia.

"We decided we could not get involved because most members are simply convinced there is no dumping," says Bart De Turck, of the European Furniture Manufacturers Federation.

"Because the Chinese currency is pegged to the dollar, companies there are actually getting about 20% more in their own currency than three years ago. It seems unlikely they have resorted to dumping to sell their products.

Poliform factory
Competitive factories can still operate in Italy

Instead, Mr De Turck believes "the real problem is the loss of competitiveness and the vast cost of employing people" in the EU.

"That's something we have to deal with, rather than take measures which might only end up with retaliation," he says.

"There is a huge amount of export business to the Far East that would be at stake."

It remains to be seen if Trade Commissioner Peter Mandelson is convinced there is any evidence for anti-dumping action against the Chinese furniture industry.

But the doubts being expressed about the wisdom of even pursuing this course is a sign that many in Europe are now realising there is little point in trying to put up barriers to stop globalisation.


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