Positive Chinese development but…When we talk about the vigilance required in trade-related issues (see this column yesterday), the first reflex is to think about China. In part, it is logical because Chinese products are by far the most visible due to the quantity of them and the volume of infringements they are accused of. Nonetheless, a change in the Peking authorities' attitude should be acknowledged and it continues to evolve: they are increasingly more collaborative in the war against counterfeiting and other illicit practices, and their courts come down hard on some of the fraudsters (two death sentences, which will undoubtedly be carried out, in connection with the affair involving children's milk containing melamine). At the same time, China has relaunched its relations with the EU and several cooperation projects and programmes have been announced.
A productive investigation. Some negative points still persist. China continues to subordinate its relations with the EU to unjustified political conditions. Last December's EU-China summit was cancelled because Mr Sarkozy had met the Dalai Lama and for the same reason, the Chinese prime minister did not visit Paris during his trip to Europe. A second and more substantial negative point is the persistent and extremely large number of non-compliant Chinese products and infringements. Investigations on the ground prove it. The most recent one to my knowledge was committed in Le Havre port area and was brought to light last week by one of the main French weeklies (Le Nouvel Observateur). Hundreds of thousands of Chinese containers end up in this port every year. It is impossible to inspect all of them and actual inspections of them carried out are less than 3% of the total.
This is more than sufficient for the customs officers to make disconcerting discoveries: banned colourings in sauces, peanuts containing a carcinogen, antibiotic residue in honey, rotting fish pulp for a cosmetics company. And cigarettes? A container indicating deckchairs contained boxes of imitation Marlboro cigarettes. Customs officials indicate that tax evasion in this area is massive and is '”more profitable than drug trafficking and less risky” added to which, are the health risks: “if you knew about the horrors we found inside them - anti-freeze, tar etc.” The case of DMF (Dimethylfuran, for mould prevention) was discovered because the entire press gave it a lot of coverage. DMF provokes eczema, burns and even lung infections; in the EU it is going to be banned outright. Other Chinese products may contain it and several trials are going on or have been announced against the distributors involved.
European complicity. Some counterfeiting is even more dangerous, particularly those involving medicines. European traders and distributors, however, are also partly responsible. Customs officials indicated that Chinese chickens were labelled as Brazilian in an attempt to break the avian flu embargo. They also cited a case of rabbits containing an antibiotic (banned in Europe) but processed into stuffed slices of meat and distributed in school canteens (the legal authorities took action against the French distributor). One importer mass produced labels claiming European made toys, although they came from China!
The author of the investigation questioned the European commissioner in charge of consumer protection, Meglena Kuneva, who denounced the infringements and at the same time recognised the spirit of cooperation in which the Chinese authorities had already “withdrawn export licences from 701 companies”. It is not difficult, however, for the companies to change their names and corporate identities.
A lot still needs to be done and vigilance remains the watchword. Demanding respect for rules and blocking illegal goods is not protectionism. On the contrary, efforts and a robust approach must be further strengthened and the EU should at the same time call for reciprocity in the opening up of markets. Big trade interests and some distributors that largely benefit from very low price imports are defending their corner, which is to be expected, as are the companies that have largely relocated their production outside the EU. This is effectively behind the current campaign for EU protectionism and those instigating it are as always, the usual suspects. However, at the same time, European companies are beginning to regret some of the relocations initiated and are making an about-turn, a development that warrants specific comment.
Shift at European Parliament. In another area, the direction of the European Parliament appears to be evolving. The report by Ms Corien Wortmann-Kool, approved by a large majority at the international trade committee (EUROPE 9825) underlines reciprocity, the war against counterfeiting and the protection of intellectual property. We are eagerly awaiting the next plenary session debate.
(F.R./transl.rh)