Brussels, 15/05/2013 (Agence Europe) - Already busy in a dispute with Beijing on solar panels, Europe is opening up a new front in the trade litigation that pits it against China.
Following on from the retaliatory measures proposed against Chinese solar panels last week (see EUROPE 10843), the European Commission is staying the course of taking a hard line against China. On Wednesday 15 May, European Commissioner for Trade Karel De Gucht announced the Commission's “decision in principle” on an anti-dumping and anti-subsidy investigation targeting Chinese telecommunications equipment. This decision in principle means that the formal investigation will not be activated for the time being to allow for negotiations towards “an amicable solution” with Beijing, De Gucht stated.
The investigation, which will be launched ex officio - in other words, on the Commission's own initiative and not following an official complaint by the EU telecoms industry - would target telecoms network equipment (2G, 3G and 4G), but not end-user equipment (telephones, modems and tablets). De Gucht did not mention the name of the Chinese companies that are targeted, but his staff suspect the two big Chinese groups on the market - Huawei and ZTE - of benefitting from Chinese public support in the form of loans at preferential rates.
This action comes at a sensitive time for European equipment makers - Ericsson of Sweden, Nokia Siemens of Finland and Alcatel-Lucent of France - who want to grow their activity in China by winning contracts with Chinese telecoms operators that invest in the deployment of new generation telecoms networks in the country. For this reason none of them have made a complaint to the European Commission - for fear of possible retaliation against their activity.
The ex officio investigation planned by the Commission thus offers European telecoms equipment makers “a shield” against the risk of trade retaliation from Beijing - to quote the word of De Gucht's spokesperson, John Clancy, who was questioned after reading De Gucht's statement. Rejecting the idea of a trade war between the EU and China - an idea already fuelled by the litigation on the photovoltaic industry - Clancy has urged the Chinese authorities to take a step and commit to formal negotiations with Brussels. He said that time is pressing but refused to give any details about the length of time left to Beijing before the official launch of an investigation.
Commission staff have been gathering proof for over a year against the unfair trade practices from which Chinese telecoms equipment makers benefit, Clancy added, and he stressed the justification of the planned investigation. He stated that the trade defence is justified and a normal response in a legal framework. He went on to say that when the Commission acts, it does so on the basis of proof. According to the Commission, Chinese exports of telecoms equipment to the European market represent just over €1 billion per year.
The Commission last week proposed to member states that they impose heavy taxes (of 47% on average) on Chinese exports of solar panels. The member states are due to approve these provisional anti-dumping duties by the end of May, while awaiting the closure of the Commission's anti-dumping investigation by December. Beijing responded immediately last week by announcing an anti-dumping investigation into seamless tubes produced in the EU. Currently, 18 out of the 31 anti-dumping investigations being led by the Commission concern Chinese products. (EH/transl.fl)