At a public hearing organised by the European Parliament’s Committee on International Trade (INTA) on Wednesday 15 April, MEPs discussed EU-China trade relations with a panel of experts. The issue of Chinese industrial overcapacity, resulting from massive investment combined with weak domestic demand, dominated the discussions.
Following the adoption of a provisional agreement on safeguard measures in the steel sector (see EUROPE 13848/3), discussions focused on the European response to this phenomenon, which has now spread to several industries.
According to Inès Van Lierde, co-chair of the AEGIS Europe industrial alliance, these imbalances are no longer confined to the steel industry. “In the ceramics industry, for example, Chinese production capacity is now 8.5 times European consumption”, she reported.
Judith Kirton Darling, General Secretary of the European industrial trade union federation IndustriAll Europe, agrees: “Steel was the first sector identified, but overcapacity has since spread to other industries. Europe must be ready to mobilise various trade defence instruments”.
Marie-Sophie Dibling, partner at Cassidy Levy Kent, pointed out the limits of such tools. “Responding effectively to overcapacity would require the initiation of a considerable number of anti-dumping proceedings, at a time when the relevant departments of the European Commission are already under pressure”, she explained, welcoming however the measures taken for steel. The question of extending this type of measure to other industries has also been raised.
Asked by MEPs what attitude to adopt towards China, Bernhard Bartsch, Director of External Relations at the MERICS think-tank, reiterated the need for Europe to become more independent, but considered that “decoupling is not a desirable solution”. “If we don’t want to sacrifice our ecological transition objectives, we need Chinese technologies”, he stressed.
Lastly, Maria Martin-Prat, Deputy Director General for Trade at the European Commission, stressed that the fundamental challenge lay in the competitiveness of China’s economic model and industrial policy. “There is a real sense of urgency to recalibrate our relationship with China. But we must cooperate with the world’s second largest economy, not disconnect from it”, she declared, calling for the completion of the European internal market to be made a priority, even before the adoption of new industrial policies. (Original version in French by Juliette Verdes)