Brussels, 23/01/2009 (Agence Europe) - Adopted by a wide majority by the European Parliament's International Trade Committee on 21 January 2009, the report by Dutch EPP-ED MEP Corien Wortmann-Kool on the EU's economic and trade relations with China, which became the EU's second largest trading partner in 2007, urges Beijing to open up its markets to a greater extent and pass binding legislation on human rights, the environment, sustainable development and social issues.
The introduction to the Wortmann-Kool report states that trade relations between the EU and China, where a new partnership and cooperation agreement (PCA) are currently being negotiated to replace the 1985 cooperation agreement, should be based on reciprocity, sustainable development, respect of environmental constraints, competition and fair trade. In the face of the international financial crisis, the Foreign Trade Committee says that greater cooperation is required between the two trading partners in the search for solutions. Urging China to play an active role at the World Trade Organisation (WTO), the report notes that public support measures to counter the current economic crisis should be temporary, respect WTO rules and not distort competition. The International Trade Committee wants the European Commission to work more closely with Beijing to remove the final obstacles to China being granted market economy status at the WTO. Noting that the development of trade relations in China should go hand in hand with strengthened political dialogue, the committee recommends permanent dialogue to avert and solve trade disputes. It also urges the Commission to call for a strengthening of the human rights clause in the negotiations over a PCA.
The Foreign Trade Committee expressed particular concern at the restrictions or outright ban on foreign investment in some sectors of the Chinese economy and the introduction of discrimination against foreign companies, particularly when it comes to cross-border mergers and acquisitions. In addition to the non-tariff barriers, the committee also slams excessive red tape, the under-valuation of the yuan, disguised subsidies, weak application of intellectual property rights (IPR) and state intervention in industrial policy that hinders full access to the Chinese market for European companies. The Foreign Trade Committee therefore calls on China to further open up its goods and services markets and pursue economic reforms to establish a stable, transparent legal framework for EU companies. It hails Beijing's progress in moving towards the establishment of a European SME centre in the capital and the European Commission's plan to set up the Gateway to China training programme for European managers in China by 2010.
A weighty chapter in the Wortmann-Kool report covers intellectual property rights. The Foreign Trade Committee expressed concern at the increasing numbers of Chinese patents that are simply copies or minor amendments to existing European technology rather than being true innovations. It is also concerned at the sheer scale of production within China of counterfeit and pirated goods, but welcomes the signing of a joint action plan on customs authorities' implementation of IPR in order to increase customs cooperation to seize counterfeit goods and implement measures to reduce the sale of counterfeit goods. The committee urges the European Commission to negotiate with China to get it to join the anti-counterfeiting trade agreement. Calling for EU-China dialogue to continue on textiles, the Foreign Trade Committee hailed the work of the IPR assistance bureau, which provides information and training for SMEs on the protection and implementation of IPR in China.
A large section of the Wortmann-Kool report deals with the social and environmental impact of China's economic growth model. Concerned about the severe pollution generated by Chinese industry and growing Chinese consumption of natural resources, the Foreign Trade Committee stresses the EU's joint responsibility because EU companies own or control a considerable proportion of Chinese industrial production, much of which is consumed in Europe. It recognises, however, that one cannot expect China to ask its people to bear the burden of cutting greenhouse gas emissions without efforts being made by the West. The International Trade Committee urges China to ratify International Labour Organisation (ILO) conventions and urges EU companies operating in China to follow the highest international standards and denounce child labour. (E.H. trans fl)