PRESS RELEASE: China MES - EU industry welcomes initiative of Germany and France - Ministers' paper leads the way to solving the issues with China

17 May 2016 / AEGIS Europe, the alliance of manufacturing industries in Europe, welcomes the initiative of German and French Trade Ministers to promote an effective anti-dumping instrument and to oppose the premature granting of Market Economy Status to China.

During the Trade Council meeting last Friday, the French and German Ministers presented a position paper in favour of a broad modernisation of EU trade defence instruments. In line with last week's EP resolution, the text emphasizes that the EU must take full advantage of WTO rules, which enable efficient measures against unfair dumping. The paper builds around the fact that China's WTO Accession Protocol, even after December 2016, continues to allow non-standard calculation methods in dumping investigations which address the distorted features of the state-controlled economy in the People's Republic of China.

AEGIS spokesman Milan Nitzschke said, "The two countries' initiative may show a way out of the EU's dilemma in the face of China's demand to be treated as a market economy, which would make EU anti-dumping instruments entirely ineffective. Germany and France ask for an effective solution within the bounds of the WTO rules. As they point out, there is no requirement that WTO members automatically grant China MES in 2016. And there is room enough for justified protection against unfair trade. Other major trading partners, like the U.S. and Canada, take the same approach."

By complying with China's WTO Accession Protocol, the EU would discourage retaliatory tendencies in China. The Accession Protocol provides that whenever Chinese companies or China can clearly prove that market economy conditions prevail for an industry or sector, the so-called standard calculation method is to be applied for the relevant producers. But as long as that is not done, specific alternative calculation methods not based on Chinese prices and costs are allowed, and must clearly be used to address state influence and dumping.

According to AEGIS Europe, this is consistent with the joint German and French request for more efficient trade defence instruments as such. Industry supports suggestions to speed up proceedings and address sectoral overcapacities.

Mr Nitschke concluded, "An early warning system, ex officio investigations, the acceleration of proceedings, SME support and restrictions to the so-called lesser duty rule are good and appropriate suggestions to increase the efficiency of trade defence instruments, and to better protect jobs and investments in the EU against unfair trade practices."

However, AEGIS Europe recalls that none of these measures are able to remedy the inefficiency of the Anti Dumping Regulation, should MES be granted to China by the EU.

About AEGIS Europe

AEGIS Europe brings together nearly 30 European associations representing a broad variety of industries including traditional industries, consumer branches, SMEs and renewable energy sectors, accounting for more than €500 billion in annual turnover and millions of jobs across the EU. This industry alliance, made up of leaders in sustainable manufacturing and social and environmental responsibility, is committed to European manufacturing as the fundamental driver of innovation, growth and jobs in Europe.

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Natalia Kurop
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