Brussels, 25/05/2016 (Agence Europe) - In a joint statement on Tuesday 24 May, the European Trade Union Confederation (ETUC), the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and the Canadian Labor Congress (CLC) urge the leaders of the EU, Canada and the USA to reject granting market economy status (MES) to China for as long as the country maintains its current level of state intervention in its economy.
“Granting MES to China would severely undermine the most effective tools we have to respond to China's unfair trade practices. Even a cursory review of the Chinese government's interventions in stock and currency markets over the last several months, not to mention the ongoing practice of concessionary loans by many state banks to keep non-viable entities in operation, demonstrates the degree to which China remains a non-market economy”, the ETUC, AFL-CIO and CLC state.
Despite its economy being lacklustre, China - which produces over half of the world's steel (50%), aluminium (55%) and cement (60%) - has maintained its overcapacity in these sectors, as well as in ceramics, tyres, paper, glass and solar panels, and exports its surplus at below-market price, the unions state. “This practice has caused irreparable harm to our industry. It has devastated communities and cost thousands of workers their jobs”, the ETUC, AFL-CIO and CLC complain.
“China does not uphold the principle of fair competition in its trading relationships. Granting MES to China would remove any incentive for China to move from a state-led economy to a social market economy, to respect labour standards and to create a global level playing field”, the unions state. They also criticise China's interference in trade union affairs and state control of trade union organisations, as well as the lack of free collective bargaining.
The ETUC, AFL-CIO and CLC also warn of the “devastating” effect on a large number of manufacturing sectors in the EU if China is granted MES. This could lead to a flood of cheap imports into the EU as a result of trade deflection. The unions call on the EU to continue using non-market economy methodologies in order to reveal the true level of Chinese dumping. In addition, they underline that granting China MES in exchange for concessions as part of an EU-China agreement on investment would be a “grave mistake”. (Original version in French by Emmanuel Hagry)