BRUSSELS, Feb 4 (Reuters) - Candlemakers are the latest European manufacturers to seek anti-dumping duties on cheap imports from China, raising the prospect of another trade row in the bloc.

European companies making candles have complained to Brussels that Chinese rivals benefit from unfair export aid.

"The observed underselling corresponds closely with the export subsidies given by the Chinese state," the European Candle Institute -- representing producers in the Netherlands and Germany -- said in a statement on Monday.

U.S. anti-dumping measures on Chinese candles had spurred Chinese exports to the European Union, which in 2006 accounted for more than 30 percent of the market and helped bankrupt some European producers, the statement said.

EU trade chief Peter Mandelson has accused China of doing too little to rein in its snowballing trade surplus and his officials recently agreed to launch anti-dumping probes into imports of steel from China and other countries.

China has denied dumping in that case and others.

Just as European engineering and shipbuilding companies are concerned at the prospect of duties adding to the price of steel imports, European retailers are worried about an increase in the price of candles, which they import in huge volumes from China.

"It only distorts international trade and will definitely make the products that we and others are retailing in Europe more expensive," said Lars Braberg, head of the Brussels office of Swedish-based home retailer IKEA.

"It is not in the interest of European consumers," he said.

EU governments have split repeatedly in recent years over whether to impose duties on imports such as shoes and energy-saving lightbulbs from China and other Asian countries.

Given the depth of the split between the bloc's free-traders and governments worried about local jobs, Mandelson has put on hold his plans for a reform of the EU's anti-dumping rules.

The European candle producers said the Commission would decide by early March whether to launch an anti-dumping investigation, which could lead to the imposition of duties within nine months.

Reporting by William Schomberg

Editing by Jon Boyle

02.04.08, 12:23 PM ET

Source: reuters