New rules on trade tariffs for Chinese imports are due to be introduced by the EU, which will change the way of calculating levels of imported goods being sold below cost price. The new rules will make it harder for EU countries to discourage the dumping of goods.
The changes are being introduced following China’s long term demands for fairer treatment over its exports. It claims that it’s being treated as a non market economy, causing the EU to unnecessarily impose high rates of duty in order to stop trade dumping for products that the Chinese government say are fairly priced.
The levies will apply to good worth billions or euros, including steel, solar panels, bicycles, kitchenware and paper. According to Hosuk Lee-Makiyama, director of the European Centre of International Political Economy in Brussels “China has coveted market-economy status as the ultimate recognition from the West.”
The new regulations will make it lot harder for EU companies to argue that they are competing against subsidised competitors. There are concerns that this could be damaging for EU businesses, including those in the steel industry, which have already seen a negative effect as they are unable to compete.
However, it’s being welcomed by others, including the solar panel industry, who had previously warned that “Import tariffs on Chinese solar PV hurt the domestic industry more than they help it. For the sake of the EU and the planet, they must end”
According to Laurent Ruessmann, trade expert in the Brussels office of law firm Fieldfisher “There’s going to be much more work for European industries to make their dumping cases. There’s a lot of discretion for EU trade authorities in the new system. The question is how that discretion is used and what the political influence will be.”
The changes to the system don’t come as a surprise. Improving trade relations with China has been on the EU’s agenda for some time. As its second biggest trade partner it’s eager to build a strong relationship, especially as the US has recently rejected the idea of making a similar deal with China.
A statement from the Commission says that “The EU is committed to open trading relations with China. However, the EU wants to ensure that China trades fairly, respects intellectual property rights and meets its obligations as a member of the World Trade Organization (WTO).”
Hosuk Lee-Makiyama has called the deal “an elegant solution”, adding that “The EU has found a near-impossible compromise between the demands of European industry that thinks China is the enemy and the bloc’s legal obligations under the WTO. There remains plenty of scope to defend manufacturers in Europe because, in a way, Europe is abolishing the diploma just as China graduates.”
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