If the law passes, tougher restrictions on child security standards would make lighters, particularly those made in Wenzhou, a coastal city in Zhejiang Province, harder to sell. Wenzhou faces losing its 70 per cent share of the European market.

"This is a live or die situation for us," said Huang Honggui, vice-chairman of Wenzhou Lighter Association.

With the passage of the law, officials see only two hard ways out, said Lin Rong, secretary general of the Wenzhou Lighter Association.

One is to further elevate standards and raise the present one-euro-price to two euros, effectively ending their price advantage in Europe.

The second is to add safety locks to lighters as requested, but that comes at a price, since the European patents cost a great deal of money, the secretary-general added.

"Either option places China in a tough position," he said.

At the core of this dispute is the competition between Europe's advantages in technology and China's cost advantage, analysts said.

Lin stressed that the price of a lighter should have nothing to do with safety standards.

There has also been no complaints over the past 10 years regarding the safety of Wenzhou lighters, he added.

"All our exported lighters are qualified products approved by international standards. This law discriminates against China, and it has broken the non-restrictive principles of the World Trade Organization," Lin added.

The issue was raised in October 2001, when EU members began drafting the law that would ensure children's safety by restricting all toy lighters to Europe and requiring that lighters under two euros must be equipped with a safety lock.

Chinese lighter manufacturers counter that child safety requirements should not be based on the price of the lighter.

"We fully understand the importance of child safety. But we think that should have nothing to do with a lighter's price. If a lighter as expensive as 500 euros is not safe, it is not safe," said Li Jian, chairman of Wenzhou Lighter Association. "Since we are the only country in the world that produce lighters under two euros each, this proposed law is obviously aimed at China," Li said.

A group of seven officials from both the provincial foreign trade and economic bureau and the city's lighter association travelled to Europe in March and April to lobby against the law.

On a 14-day-trip, the group visited Germany, France, Italy, and several other European Union countries, to discuss the issue with several organizations, said Lin Rong, secretary general of the Wenzhou Lighter Association.

"Although most of the member states expressed their understanding on the issue, we have no idea at all about the result," Lin added.

The issue over changes to lighters has led to major friction in international trade.

In 1994, a similar law was passed in the United States, preventing almost all of Wenzhou lighters to enter the US.

"Although we have been trying for eight years, we are still losing our American market, which now only accounts for one fifth of our annual export volume to Europe," said Lin.

Europe challenged Wenzhou in 2000 with the reason of anti-dumping. Due to Wenzhou's quick response, the case was not put on record in the end, as Wenzhou offered sufficient evidence.

"We never expected that the European Union could come back on us again one year later," said Lin.

In Wenzhou, there are more than 500 lighter manufacturers that produce 5,000 kinds totalling 500 million lighters each year. Among that, 80 per cent are exported abroad. Lighters from Wenzhou make up 70 per cent of the world's market for lighters with metal shells, and 80 per cent of the European market.

(China Daily April 26, 2002)