EU, China Hold Meeting On Trade Disputes
31 May 2013
Posted by: Author: Mary Swire
Source: Mary Swire (Tax-News.com, Hong Kong)
Following the meeting in Berlin between Chinese Premier Li Keqiang and German Chancellor Angela Merkel, during which both countries professed their intention to resolve all trade conflicts by negotiation, rather than the imposition of substantial duties, European Trade Commissioner Karel De Gucht met Chinese Vice-Minister of Commerce Zhong Shan in Brussels.
It was disclosed, earlier in May, that the European Commission (EC) is considering launching its own anti-dumping duty (AD) and anti-subsidy countervailing duty (CVD) investigations of imports into the European Union (EU) of mobile telecommunications equipment from China, totaling around EUR1bn (USD1.29bn) per year.
In addition, in what has become a more pressing problem due to provisional determinations being expected early next month, the EC 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.
At the meeting in Brussels on May 27, which had already been organized for a China-EU Trade and Investment Policy Dialogue, Zhong reiterated that the EU's impending actions could seriously hurt the Chinese companies and workers involved and seriously sour trade and economic cooperation between the two sides.
He stressed that "such practices of trade protectionism are not acceptable to China." Given the large value of bilateral trade between China and the EU, he added that "it is only natural to see some trade friction. The right focus should be on resolving those frictions appropriately. Taking abrupt and unilateral action does not help problem-solving, but will rather set the parties further apart and aggravate the tensions."
If the EU were to impose provisional ADs on Chinese solar panels and to initiate an ex officio case on Chinese wireless communications network, Zhong confirmed that "the Chinese government would not sit on the sidelines, but would rather take necessary steps to defend its national interest." Nevertheless, Zhong believed that the meeting in Brussels with De Gucht was "constructive and the exchanges were useful."
However, the EC was less than effusive, and it seems to have become more likely, rather than less, that provisional ADs will be imposed on Chinese solar exports to the EU.
A statement by the EU Trade Spokesman John Clancy after the meeting emphasized that "De Gucht expressed clearly that he was ready to negotiate a solution on the solar panels case," but that it was also indicated that De Gucht intends to "examine the possibility of a negotiated settlement in partnership with the United States should this become necessary."
De Gucht has "made it very clear to the Vice-Minister that he was aware of the pressure being exerted by China on a number of EU member states, [but that it] is the EC which has the role of deciding on provisional tariffs." At a hearing with the European Parliament's trade committee, he is reported to have added that China "can try to put pressure on member states, but they will waste their time trying to do so with me."
Clancy's statement concluded that the EC "will look at any proposal to be made after the imposition of provisional measures, if any. In this respect, the ball is very much in China's court. The final decision on possible provisional measures in this case must be taken by June 5, according to the legal process. The full investigation continues and will conclude in early December 2013."