Brussels, Thursday 22 September 2016 - On the eve of the informal meeting of EU Trade Ministers due to take place on 22 and 23 September in Bratislava, AEGIS Europe, an alliance of manufacturing industries, sent a communiqué to Ministers urging them to safeguard European trade defense instruments (TDIs) - and ensure that European manufacturing has a future.
“Any new methodology that is developed by the EU to address dumping by Chinese producers must be sufficiently defined and include a clear link with the EU's five long-established market economy criteria. Without these criteria acting as the bedrock of European trade defense there will be an increased danger of legal uncertainty and consequently a greater risk for investments and manufacturing jobs in Europe,” stresses Milan Nitzschke, spokesperson for AEGIS Europe.
So long as China does not follow the rules of international free trade and continues to operate along non-market economy lines, with policy planning that favours distortions and overcapacities, the EU must defend itself using proven legal principles. Otherwise the state-planned economy of China would play ping-pong with the EU's market economies.
“The EU's five market economy criteria is an essential tool to fend off predatory Chinese manufacturing practices that are borne of massive overcapacity and state-subsidised dumping in the market. They are unchallenged at WTO level and were already in place when China joined the WTO,” points out Mr Nitzschke.
Furthermore, the European Commission's suggestion that it intends to shift the burden of proof during an investigation must not result in an increased burden for complainants. Otherwise, there would be a real risk that European industries, and particularly SMEs, will not be able to bring forward complaints against dumped imports from China.
"China is claiming to be an economy in transition. Logically it is for China to prove that it fulfills market economy criteria and eliminates market distortions, not the other way around," states Mr Nitzschke.
“The European manufacturing sector provides jobs and livelihoods for millions of citizens in Europe across a diverse range of sectors from A to Z, aluminium, bicycles, ceramics, glass fibre, solar and many more. We urge Trade Ministers to be vigilant and stand up to state-subsidised dumping,” concludes Mr Nitzschke.
Find the letter here.
Notes for Editors
China now makes and sells more manufactured goods than any other country in the world. However, the defining feature of its industry is state-subsidised overcapacity. Examples of this are widespread - Chinese capacity in the solar sector is 1.3 times global demand. Silicon capacities are more than twice global consumption. Due to massive overcapacities, 60% of China’s aluminium industry’s production is loss-making. Chinese steel overcapacity is estimated to be 350 to 400 million tonnes, which dwarfs total EU annual steel demand of 150 million tonnes.