Brussels, 28/04/2011 (Agence Europe) - The European executive arm is continuing its investigation into Chinese export credits. Commissioner De Gucht does not rule out possible recourse to the WTO.
For several months now, the European Commission has been looking into whether Chinese export credits are in compliance with WTO rules on government subsidies. Export credits are state-sponsored export financing facilities and loan guarantee programmes for firms. Although most industrialised nations have signed up to an international agreement at the OECD, which prevents very reduced interest rates on credits or other favourable provisions that could be considered as government subsidies to exporters, China has not. An increasing number of EU companies are now denouncing Chinese export credits as part of a network of subsidies granted by Beijing, which allows national companies to seize ever-larger markets in Europe, the Middle East and Africa, at the expense of EU firms. Markets are worth several billion euros in many industrial sectors, ranging from telecommunications equipment to aviation.
In a written response dated 27 April, in answer to a question raised by Syed Kamall, MEP (ECR, UK) on this subject, Trade Commissioner Karel De Gucht states he does not rule out recourse to the WTO against Chinese export credits, despite dialogue with Beijing on this. The commissioner explains: “China's use of export credits clearly merits attention and the Commission has been monitoring it closely. However, there is very little transparency of subsidies granted by China to its businesses. It appears that China is not following the international standard in the field - the Arrangement on Officially Supported Export Credits, negotiated under the auspices of the Organisation for Economic Cooperation and Development, OECD, of which China, however, is not a member. Whether the Chinese measures also amount to a violation of the World Trade Organisation (WTO) Agreement on Subsidies and Countervailing Measures has not yet been established. There are indeed an increasing number of cases where EU export credit agencies, which adhere to the OECD and WTO disciplines, cannot match the credit terms of the Chinese official support, and there is evidence to suggest that this has led to a loss of business for European companies in a number of important sectors, including information and communication technology, ICT”. Despite dialogue engaged with China at the highest political level on this issue, e.g. during the 3rd High-Level Economic and Trade Dialogue (HED) with China in December 2010, and continued in the context of negotiations on a new partnership and cooperation agreement, the Commission is “ready to support EU companies in seeking legal solutions to the problem, including recourse to WTO dispute settlement, if justified and appropriate, in the event that a substantiated complaint is formally lodged with the EU”, De Gucht said. (E.H./transl.jl)