Brussels, 03/02/2016 (Agence Europe) - As at the European Parliament the previous day (see EUROPE 11481), European Commissioner for Trade Cecilia Malmström presented the European trade ministers with three possible options on Tuesday 2 February as regards granting China market economy status (MES), together with a preliminary impact analysis.
“The intention was not to take a decision today. I outlined the different options. We are making further analysis of impact. We have had very intensive contacts with different stakeholders. We will continue to do this in public consultations this spring. We will come back with this issue just before the summer”, Malmström stated at the end of the informal EU trade ministers meeting in Amsterdam on Tuesday.
“It is a complicated matter and it is further aggravated by the distortions in the Chinese economy which makes the situation extremely sensitive for many people around the globe, particularly on the steel market. To grant China the MES, or rather to change the way we calculate in the protocol (of China's accession to the WTO), has to be accompanied by measures to make sure that we still have strong trade defence instruments to address unfair practices from China or other countries”, Malmström added, before saying: “Of course, China is not a market economy”.
“We need to comply with WTO obligations but we also need to take into account legitimate concerns of European producers and users. That was also voiced by member states. We had an interesting debate on possible options based on a paper presented by the Commission. The three options have been presented as a framework for the debate, not as directives”, the Dutch minister for trade, Lilianne Ploumen, stated.
The Commission's information note (available at: http:// goo.gl/H6mvRc) takes account of the preliminary results of a study conducted by an external consultancy and of intense contacts with the different stakeholders, the member states and European Parliament.
Three options are on the discussion table regarding this issue: (1) not proceeding with any change in the EU legislation once certain arrangements in the protocol of China's WTO accession have expired in December 2016 - in other words, keeping China on the list of non-market economies, which would put the EU in breach of WTO rules and would result in retaliation measures from China; (2) removing China unconditionally from the list of non-market economies in the EU's anti-dumping legislation, which would be extremely harmful for EU industry and jobs; (3) removing China from the list of non-market economies, but introducing mitigation measures through strengthening the EU's anti-dumping arsenal.
There are currently 52 anti-dumping measures being applied to Chinese products, accounting for 1.38% of total Chinese imports into the EU. These concern the steel, machinery, chemicals and ceramics sectors - activities which account for 250,000 direct jobs in EU countries. According to Eurostat, China's exports to the EU accounted for €302.4 billion in 2014, compared with €164.7 billion in EU exports to China.
The anti-dumping duties imposed by the EU on China's exports of goods (the price of which the EU deems as artificially low due to Chinese state aid) are calculated on the basis of prices or costs observed in 'similar' countries to the country from which the exports are targeted. This method of calculation would no longer be applied if China was granted MES. (Original version in French by Emmanuel Hagry)