Brussels, 20/10/2014 (Agence Europe) - After two years of intensive negotiations, the European Commission and Chinese government finally reached an amicable settlement on Saturday 18 October, putting an end to the dispute between the EU and China on the support granted by Beijing to Chinese manufacturers of telecoms equipment.
European Commissioner for Trade Karel De Gucht and China's Minister for Trade Gao Hucheng found the ground for agreement on this dispute that has gone on for two years during the EU-China Joint Committee in Brussels on 18 October. De Gucht therefore took the official decision to renounce his ex officio investigation targeting the Chinese-granted subsidies to telecoms equipment manufacturers.
The settlement is based on the following elements: - the two parties will task an independent body to monitor the European and Chinese telecoms networks markets; - China will guarantee access to its standard setting body for European companies without discrimination; - the two parties will guarantee equal treatment for companies bidding for publicly funded research and development projects; - the EU and China will advance the work of the international working group on export credits, whose objective is to adopt sectoral and horizontal disciplines in the field. “With this settlement, we have a better situation of competition for European companies”, said De Gucht's spokesperson on Monday 20 October.
“The EU pursues every opportunity to level out the playing field for our companies by engaging with our strategic partners including China. The concerns that have led us to launch the case last May can now be addressed in a systematic and regular dialogue between the two sides for the benefit of our industry”, De Gucht stated.
Since 2012, the Commission has suspected Chinese telecoms equipment manufacturers Huawei and ZTE (it has never mentioned their names publicly) of benefitting from public support in the form of loans at preferential rates, enabling them to offer prices in the EU that are 18% lower than those of EU manufacturers. Huawei's market share has thus increased from 2.5% in 2006 to its current 25%.
The products targeted were telecoms networks equipment (2G, 3G and 4G) but not terminals (telephones, modems and tablets). The import of mobile telephone network equipment in the EU stands at €1 billion per year.
Considering that European equipment manufacturers - Ericsson from Sweden, Nokia Siemens from Finland and Alcatel-Lucent from France - were penalised by the knock-down prices offered by their Chinese competitors in Europe, but that these European companies had rejected the idea of appealing out of fear of possible retaliation against their activities on a booming Chinese market, the Commission took a principled decision in May 2013 to open ex officio anti-dumping and anti-subsidy investigations. The Commission had earlier withdrawn the opening of an anti-dumping investigation in March 2013. (EH)