And now, agriculture! We're not quite finished with China. Every day brings a few more surprises. This week's novelties include the appointment of a Chinese negotiator for textiles and an alert on imports of Chinese agricultural products. There's nothing surprising about the first one; it doesn't take a rocket scientist to work out that having spoken out against the EU hypothetically adopting autonomous restrictions on imports of their textiles, the Chinese might decide to make a few voluntary concessions. What the Chinese are worried about is not a temporary slow-down in their conquest of the European market; it's not the end of the world if they have to take it a bit more slowly because they're already home and dry. They want to make sure that the EU does not apply the autonomous safeguard clause, and they will manage it even if this clause is enshrined in the texts, and therefore legitimate. There's an old Chinese proverb that goes something like: “a temporary victory lies in force, a sustainable victory lies in wisdom”.
The second piece of news is a more of a worry. European producers of tomato purée have called for an inquiry into imports from China, which have apparently reached a level which is equivalent to the entire Italian production. Final processing in Europe means that the indication of its Chinese origin is removed from the product. That's not all. Data on other agricultural products such as wines, dried beans, apples and pears show that the increase of imports from China from 2003 to 2004 was somewhere between 40% and 230%, depending on the product, and for this year, even higher percentages are anticipated. At the same time, a number of Chinese industrial products, which were only recently considered high technology, have started to gain a foothold: computers, mobile telephones, digital cameras, etc. The rest will follow, and in every case there will be the same enormous price difference. For textiles and shoes, as we know, the differences in price compared to similar European products are often in the order of 75%, which is a result of both the social conditions and of monetary dumping. We must get away from the idea that little sectorial negotiations will get us out of the Chinese nightmare. These will only give us partial and short-term arrangements. The call for overall dialogue covering commercial, economic, political and strategic issues, is becoming more and more urgent.
Those who really benefit. It won't be easy. The problems are, first of all, internal to Europe: during preliminary exchanges of views between the Member States of textile imports, about a dozen Member States (almost half, in other words) were reluctant to institute safeguard proceedings. Furthermore, Europe has to play by WTO rules: it can't take arbitrary measures. But what it can do is insist that China observe the rules in the same way: the counterfeiting and piracy of brands are as much against the rules as quantitative restrictions. Moreover, and more importantly, the European institutions should not be swayed by those who practise the “populist rhetoric of poverty”. The main victims of China's dynamism in the textile sector are the poorest countries in the world, who had been starting to carve out a niche for themselves on the European market: Bangladesh, Cambodia, Guatemala, Madagascar, plus Morocco and Tunisia, who had been badly hit by their budding industrialisation. The ravages have already started to make themselves felt. To whose advantage? Mainly that of large-scale trade and mass distribution. It is certainly true that consumers benefit too, in part, but for the big traders, it's a godsend. They no longer need to bother building up and maintaining their supply networks, now all they need to do is launch a world-wide call for tenders by pressing a button, and the responses come immediately. When the quantities called for are colossal, it's almost always the Chinese who win the contract. Massive profits are quietly squirreled away by these people, which means that they have no trouble bankrolling various non-government organisations who think they're protecting poor countries when they stand up and rail against any hint of an attack on the sacrosanct concept of trade freedom. I would really like to see a serious inquiry into the processes by which Oxfam is paid for.
In agriculture, it's going to be far, far worse. A number of years ago, the only Chinese product which caused any problems for Europe was garlic. Apples, pears and grapes weren't even grown. But when you've got hundreds of millions of disciplined rural labourers, anything's possible. In agriculture, free trade is madness. But bad habits are clearly well grounded in Brussels, as the European Commission has decided to look into a new free-trade zone with Asean.
(F.R.)