Commission’s action against imports from China questioned

Catherine Ashton, High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the EC, went to Beijing where she met with Dai Bingguo, former Chinese State councilor. The Vice-President also met with Yang Jiechi, Chinese State councilor, Wang Yi, Chinese Minister for Foreign Affairs, Chang Wanquan, Chinese Minister for Defence and State Councilor, and Yu Zhengsheng, Chairman of the National Committee of the Chinese People’s Political Consultative Conference (Cppcc). General view of the meeting between Wang Yi, 3rd from the right, and Catherine Ashton, 4th from the left, (EC Audiovisual Services 27/4/2013).

According to European Commission’s procedures, the legal dead line for a decision to be taken on the imposition or not of provisional tariffs on European imports of Chinese solar panels, expires tomorrow 5 June. It must be noted however that the EU Trade Spokesman John Clancy, when issuing a Press release on 27 May noted “if and when” such a decision is to be taken.

On that day of May, EU Trade Commissioner Karel De Gucht received the Chinese Vice-Minister of Commerce Zhong Shan in Brussels. Right after this meeting the Commission issued this Press release saying that “During today’s informal meeting between EU Trade Commissioner Karel De Gucht and Chinese Vice-Minister of Commerce Zhong Shan, Commissioner De Gucht expressed clearly that he was ready to negotiate a solution on the solar panels case. However, the Chinese side did not put any specific proposal forward today which is quite normal as we are not yet at the formal stage for negotiations which would only start – if and when – a decision is taken on provisional tariffs by the legal deadline of the 5th June”. It is worth noting that in this same market segment, the Commission has already launched anti-subsidy investigation on solar glass imports from China.

This is not the only friction in the trade relations between the EU and China. Some weeks ago, the European Commission took a decision (in principle) to open an ex officio anti-dumping and an anti-subsidy investigation, concerning imports of mobile telecommunications networks and relative equipment from China. This last action is targeted mainly against two international companies of Chinese origin, the Huawei Technologies Co. giant and the smaller firm ZTE. Those two firms have being targeted also by the American authorities.

More frictions

There are more frictions though in the bilateral trade between the EU and China. On April 12 the European Sting writer Dennis Kefalakos noted that, “The powerful EU’s executive arm, the European Commission, announced yesterday its proposal for a new legislation targeted at strengthening the protection of home businesses and products from external competition… In short the Commission is about to undertake single-handed a ground-breaking reform of the Union’s international trade relations. The question is if such a huge bet can be wan. Let’s follow the facts…There are two indications however, apart from the fact that China is the largest exporter to the EU, that this strengthening of the European defences against international competition, is aimed mainly against Beijing”.

The reserves expressed above, over the ability of the European Commission to singlehandedly carry through this quasi ‘trade war’ with China, proved to be completely justified. On the same day, when Commissioner Karel De Gucht met with the Chinese Vice-Minister of Commerce Zhong Shan in Brussels, the Prime Minister of the People’s Republic of China and party secretary of the State Council, Li Keqiang was in Berlin, meeting the German Chancellor Angela Merkel. No doubt that the main item on the agenda in this conference room was trade.

Berlin disagrees

Taking into account that Germany is the largest EU exporter and investor in China, the decisively positive statement issued by Chancellor Merkel, on the possibility to settle amicably in Brussels all those trade issues, was quite expected. This development probably means also that the Brussels Commission has overstretched its abilities to question and impede the multifaceted and complicated economic and political relations, between some major European countries like Germany on the one side and China on the other. This analysis comes under the general heading of rethinking the overall relations between the West and China.

In this respect the latest aggressive action by the EU Commission against China may follow the broad American policy line to raise a large number of issues over trade and otherwise relations with Beijing. The US public is hampered for years with news and comments blaming the Chinese imports for the cachexia of the US economy.

In view of all that the visit of the new Prime Minister, Li Keqiang, to Germany produced remarkable results. Given that Germany is a major player in European affairs it is very interesting to watch what will be tomorrow the Commission’s decision over the Chinese solar panels. Some major German companies have already expressed their disagreement over the possibility to start ‘a trade war’ with China. The same attitude was observed in the reaction of some big EU mobile telephony equipment producers like Nokia, against the option to penalise Huawei and ZTE, despite the fact that they are prime competitors. Nokia is about to launch a major new promotional campaign in China.

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