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China, Germany Vow To Negotiate Away Trade Disputes

29 May 2013   (0 Comments)
Posted by: Author: Mary Swire
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Source: Mary Swire (Tax-News.com, Hong Kong)

According to joint statements following a meeting between Chinese Premier Li Keqiang and German Chancellor Angela Merkel in Berlin on May 26, both countries intend to avoid the imposition of European Union (EU) duties in trade disputes over solar and wireless communications equipment, and to resolve all trade conflicts by negotiation.

Earlier this month, it was disclosed that the European Commission (EC) is considering opening, on its own initiative, anti-dumping duty (AD) and anti-subsidy countervailing duty (CVD) investigations into imports into the EU from China of mobile telecommunications equipment, which totals around EUR1bn (USD1.29bn) per year.

The EC had not received complaints from the industry concerned before opening its "ex officio" investigations, but believed it has prima facie evidence of subsidization by China and of mobile telecommunications equipment being sold in the EU at prices lower than market value.

Earlier this year, the EC had also confirmed that it is readying substantial ADs and, subsequently, CVDs against Chinese exporters of solar panels and solar cells into the EU. In 2011, China exported solar panels and their key components worth around EUR21bn to the EU.

Warnings of the serious consequences of both actions have already been given by China's Ministry of Commerce (MOFCOM), which, with regard to the EC's unilateral action against Chinese mobile telecommunications exporters, said that "the trade restriction measures unilaterally taken by the EU will undoubtedly do harm to industrial interests on both sides," especially as China believes that most EU member countries disagree with launching an investigation.

MOFCOM has stressed recently that trade disputes should always be settled through dialogue and consultation, and that countries should exercise caution and restraint before using trade remedy measures. The Ministry sees itself as fighting a tendency, led by the US, and now the EU, towards global trade protectionism following the financial and economic crisis, where countries are abusing the use of trade remedy tariffs.

Following the meeting with Chancellor Merkel, Premier Li reiterated China's concerns and its opposition to the EC's "abuse of trade remedy measures" as giving "the wrong signal of trade protectionism."

He continued that China hopes to resolve problems through dialogue and consultation to solve problems, rather than fight a trade war that "would not only hurt Chinese business and jobs, but also damage the interests of European industries, business and consumers." As Germany and China have a mutual position in opposing trade protectionism, Li looked forward to Germany playing an active role in promoting the resolution of the on-going trade friction, and maintaining the overall situation of China-EU economic and trade cooperation.

In reply, Merkel confirmed that Germany did indeed advocate cooperation to resolve problems, so as to maintain an expansion of trade and mutual commercial benefits. She promised to do everything she could to avoid the imposition of stringent duties, with both sides seeking common ground to resolve the disputes as quickly as possible.


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