Brussels, 15/10/2014 (Agence Europe) - On Tuesday 14 October, outgoing European Commissioner for Trade Karel De Gucht confirmed there would soon be an amicable settlement to the dispute that has lasted with China for over two years on the subsidies granted by Beijing to Chinese manufacturers of telecommunications equipment.
“I will, in the coming days, ask the college [of commissioners] to drop the case in the light of the agreement we have reached and the agreement itself will be made official in the coming days as well”, said De Gucht, on the sidelines of the informal meeting of European trade ministers in Rome on 15 October. “It's off the table in an acceptable way. I think we made progress on this issue”, he said, as quoted by Reuters. He did not give further detail on the settlement.
According to sources close to the case, De Gucht is reportedly ready to renounce an ex officio Commission investigation into the subsidies granted by China to its manufacturers of telecoms equipment in exchange for concessions from Beijing. The agreement is believed to be based on the following elements: China would undertake to limit export credits to its telecoms equipment manufacturers; both sides would agree to monitor the market share of the Chinese manufacturers in Europe and that of the Europeans in China; and both sides would work together on industrial research and standardisation in the sector.
The Commission suspects that Chinese telecommunications equipment manufacturers - it has never publicly mentioned them by name, but is referring to Huawei and ZTE - benefit from public support in the form of loans at preferential rates, allowing them to practise prices in the EU which are 18% lower than those of European manufacturers. In this way, Huawei's market share is reported to have risen from 2.5% in 2006 to 25% at the moment. The products in question are Chinese telecoms network equipment (2G, 3G and 4G), but not terminals (telephones, modems and tablets). Imports of mobile telephony network equipment in the EU are worth €1 billion a year. The Commission takes the view that the European equipment manufacturers - Sweden's Ericsson, Finland's Nokia Siemens, and Alcatel-Lucent of France - are penalised by the rock-bottom prices practised by their Chinese competitors in Europe, but did not wish to make an official complaint due to the concerns about reprisals against their activities on a booming Chinese market. (EH)