A deal reached on August 29, but never officially announced to the public, will allow seven of China's largest TV manufacturers to sell a limited number of sets in the EU without hassles at Customs, while imposing a minimum price on each TV set to prevent dumping.

The seven domestic TV producers are Sichuan Changhong Electronic Co Ltd, TCL Holdings Co, Xiamen Overseas Chinese Electronics Co, Haier Group Co, Hisense Group Corp, Konka Group Co and Skyworth Group.

Despite the quota and floor price, the EU will also charge a hefty 44.6 percent tariff on each set to protect European manufacturers from losing too much market share to their cheaper rivals.

Neither the floor price nor the numbers of sets Chinese manufacturers are allowed to sell in the EU have been made public.

Though the deal doesn't reduce the tariff imposed on imports from China, domestic companies are still hailing it as a victory.

"The breakthrough is that the EU will not interfere with Chinese TV manufacturers' marketing activities" as long as the made-in-China TV sets are sold above the floor price, said an official with the China Chamber of Commerce for Import and Export of Machinery and Electronics, which was entrusted by the seven companies to negotiate with the EU.

In the past, Chinese companies have accused the EU of blocking imported sets at the boarder.

While the deal isn't expected to aid Chinese manufacturers much in the short term, "it signals a more standardized EU market which will phase out trade protectionism," said Liu Haizhong, a spokesman for Sichuan Changhong Electronics.

Liu says China's entry into the World Trade Organization late last year played a role in ending the dispute. As a WTO member, China is expected to open up markets to overseas companies and investors while other WTO member economies open their markets to Chinese firms.

The TV spat began in 1988 when the EU's then 12 member began investigating accusations of dumping against TV manufacturers in China and South Korea. When none of China's 87 domestic TV makers responded to the suit, the EU imposed a 15.3 percent anti-dumping tax on sets imported from China. The tax rose to 25.6 percent in 1995 and 44.6 percent in 1998.

In 1999, Xiamen Overseas Electronics hired a Belgium law firm to prove they weren't engaged in dumping - the act of selling goods in a foreign market below production cost.

Six other Chinese TV makers joined the fight in 2000.

Su Zaiquan, a spokesman for Xiamen Overseas Chinese Electronics, denies the dumping charges, suggesting the EU imposed the taxes to protect the profits of European companies, such as Dutch-giant Philips and France's Thomson.

(Eastday.com September 5, 2002)