EU Pressurises China Over Trade

by Ulrika Lomas, for LawAndTax-News.com, Brussels

24 October 2006

The European Union is keeping up the pressure on China to do more to reform its markets. Yesterday the European Commission called on Beijing to fully implement its commitments to the World Trade Organisation; and on Monday, two EU Commissioners said that China must must redouble market reform efforts.

“We will only be able to maintain the case for openness in Europe if China shares reciprocal openness and readiness to play by the rules of trade,” EU external affairs commissioner Benita Ferrero-Waldner and trade commissioner Peter Mandelson wrote in The International Herald Tribune. “If not, we could see in Europe the growing defensiveness and protectionism that is becoming evident in some quarters in the United States.”

During October, the EU had decided to impose 'anti-dumping' duties on shoes from China and Vietnam for a further two years, and threatened to take China to the World Trade Organisation (WTO) over patent infringements.

Provisional shoe duties had been imposed last March, but expired in October. The new tariffs (lower than the provisional ones, in fact) will be 16.5% on Chinese shoes and 10% on Vietnamese shoes. Reportedly, Peter Mandelson had pushed for a 5-year tariff as requested by Italy, the country most at risk from cheap imports, but finally accepted a 2-year period as proposed by France.

Mandelson says that intellectual property is not adequately respected in China: "They're starting to take much firmer action against Chinese companies ripping off other Chinese companies, but what I want them to do is apply the same standard to European companies," he said.

In July, the EU continued talks with the Chinese government concerning its imposition of tariffs on imported automobile components. Following a complaint from both the EU and the United States, the Chinese government department of Customs Tariff Commission of the State Council said it had decided to lower the tariffs on cars, SUVs (sports utility vehicles or cross-country vehicles), and mini-buses from 28% to 25%. Import taxes on auto parts, such as auto bodies, medium and low emission gasoline engines, would be reduced to 10% from between 13.8% and 16.4%. The EU and US had lodged a complaint with the World Trade Organisation in March arguing that the tariffs breached trade rules.

In June, Commissioner Mandelson and Vice Minister of the Chinese Ministry of Commerce Ma Xiuhong, alongside representatives from the Beijing Municipal government and the Beijing Intellectual Property Office, participated in the signing of a Memorandum of Understanding between Beijing retail markets and foreign brand owners in the sportswear and fashion industries to join the fight against the sale of counterfeit goods in Beijing retail markets.

Speaking at the signing, Commissioner Mandelson explained that: “The protection of intellectual property goes to the heart of our economic relations. That is why this initiative is highly significant and should be an important step to maintain confidence in these markets: I hope we can build further on this foundation.”

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