Luxembourg, 14/06/2013 (Agence Europe) - Led by the Scandinavian nations, the pro-free trade countries are concerned about the risk of a trade war.
Having adopted a firmer attitude to China's unfair trade, the European Commission is caught in the crossfire on the issue of Chinese solar panels, the sales of which are boosted by dumping and subsidies. The Commission must deal with a handful of countries that want customs sanctions on Chinese solar panels (headed up by France, Spain and Italy) and a very wide coalition (led by Germany - the top European exporter to China - and the countries of the north that are traditionally pro-free trade - the United Kingdom and the Scandinavian countries), which fears trade retaliation from Beijing.
Before an exchange of views on this file at the European trade ministers' meeting in Luxembourg on 14 June, Denmark, the Netherlands and Sweden again urged European Commissioner for Trade Karel De Gucht to find a negotiated solution in order to avoid a trade war with China which could suffocate EU exports.
The risk of escalation became more accentuated in May - with, on the one hand, the Commission's decision to impose provisional anti-dumping duties on Chinese solar panels (despite the unfavourable opinion of 18 member states), and, on the other hand, the Commission's decision to investigate (without prior complaint from the industry) the unfair trade practices from which the Chinese telecoms equipment suppliers, Huawei and ZTE, were benefitting.
Reacting to the Commission's announcement in May, China in quick succession the launch of an anti-dumping procedure against European manufacturers of seamless tubes, then another anti-dumping procedure targeting European chemical products (two substances derived from chlorine - perchloroethylene and tetrachloroethylene). The day after the Commission's decision to impose provisional duties on Chinese solar panels - albeit progressive ones to leave Beijing time to negotiate - China retaliated by announcing an anti-dumping investigation into European wine. This is a retaliatory measure that seems to target directly the big wine producing countries in the EU - France, Italy and Spain (the countries that are most in favour of sanctions on China).
On Friday, the ministers from the free-trade nations criticised the Commission's choices. “It's not the right way to go. When one side begins to close up, the other continues. And then we have a negative spiral that doesn't stimulate trade”, said Swedish Trade Minister Ewa Bjorling, before a discussion over lunch. “There is still time to resolve this if the Commission and the Chinese move forward on the solar issue”, said Dutch Trade Minister Lilianne Ploumen. Danish Trade Minister Pia Olsen Dyhr challenged the evidence for the illegal Chinese subsidies. “We're very much against using trade defence mechanisms unless we can really show there is evidence that they are using subsidies, and we cannot do that”, she said.
The previous day, the Commission again moved to take action against China by initiating proceedings at the WTO - alongside Japan - against China's abusive use of anti-dumping duties on exports of seamless stainless steel tubes. Unbending, De Gucht has promised over recent months to use the EU's trade defence mechanisms as much as possible, or the WTO's arbitration, when up against China which “subsidises nearly everything”. (EH/transl.fl)