MEPs set to vote down China MES

Written by Martin Banks on 11 May 2016 in News
News

Parliament is expected to call on the Commission and EU ministers to block full market economy status (MES) for China unless it stops dumping cheap steel on to the market.

China's current accession protocol to the World Trade Organisation (WTO) expires in December and the EU has to decide whether to grant it MES or maintain the current position.

On Thursday, MEPs from across the political spectrum are set to unite to vote in favour of a resolution calling on the Commission and Council not to grant MES to China until the Chinese economy is one where supply, demand and prices of goods and services are determined by the market.

One senior MEP warned that granting MES now "would tighten the noose around the UK steel industry's neck."


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The dumping of cheap Chinese steel - selling it at below the price it can generate at home, or exporting it at below the cost of production - is said to be threatening the future of Europe's steel industry, with plants such as those in South Wales under threat with the loss of hundreds of jobs.

The vote is particularly timely as, on Friday, EU trade ministers will meet in Brussels to discuss a long-delayed reform of the EU's so-called trade defence instruments, reforms that have been blocked for two years by a number of national governments led by the UK.

At Parliament's plenary in Strasbourg on Tuesday, MEPs laid out four criteria they say must be met in any future arrangements, including being able to impose anti-dumping measures when necessary.

British Conservatives also called on Parliament to delay voting on the issue on Thursday until an impact assessment is completed.

The party's international trade spokesman Emma McClarkin said: "China's contravention of trade rules has impacted hard on our industries in recent months, not least the steel industry. However, we need to ensure any steps we take have a solid legal basis - if we want China to play by the rules we have to do so ourselves and respect our WTO obligations.

"It is imperative that no decision be taken by the Parliament in the absence of a legal and economic impact assessment from the European Commission."

She said there had been 5000 responses to the issue from industry and that it was "vital these are taken into account ahead of any decision being made."

"We must ensure that any proposal takes full account of the long term economic, social, industrial and strategic impact." 

Further comment came from David Martin, S&D group spokesperson on international trade, who said, "The more China dumps cheap steel onto the market, the more Europe's jobs and industry are threatened. We must stand firm in the face of this unfair competition.

"While valuing the economic benefits of greater cooperation with China, the world's largest trading nation, Europe must not be a soft touch. China is not a market economy and should not be recognised as one when calculating anti-dumping sanctions. Granting them MES in the current circumstances would tighten the noose around the UK steel industry's neck.

"We urgently need to modernise our trade defence measures and should not be afraid to use all the tools at our disposal to protect European industries against dumping and other harmful trade practices. The British government must realise that the current crisis is linked to their inaction at EU level," added the veteran deputy.

Gianni Pittella, the group's leader, tweeted that the Socialists are opposed to recognising market economy status for China. 

"As things stand today, despite progress, China is not a market economy."

ALDE deputy Marietje Schaake commented, "We share the concerns about state interference, the creation of overcapacity and lack of transparency, and reliable indicators."

European health and food safety Commissioner Vytenis Andriukaitis told MEPs it was undeniable that China was not a market economy.

He said the commission was working on a new approach that would include a strong trade defence system and at the same time ensure compliance with the WTO rules.

Turning to the trade defence instruments issue, German EPP deputy Daniel Caspary called on member states to stop the blockade on this legislation.

He said, "The strategic partnership with China is extremely important to us, regardless of whether China is considered to have a market economy or not, because it obviously doesn't. 

"At the same time, there are hundreds of thousands of European people working in the steel industry who are very worried about their jobs. We must act urgently for them to make sure that EU trade instruments are boosted. Jobs are important. 

"The European industry is important and we want to protect it."

Addressing the same issue, Swedish EPP deputy Christofer Fjellner, who is responsible for the trade defence instruments legislation, said, "I am surprised the Commission has not yet presented a solution as to how the EU should comply with WTO rules already agreed on 15 years ago.

"This is not five minutes to twelve, it is five minutes past and we are still waiting. The big question is if there is any chance of passing new laws before it is too late."

 

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Martin Banks is a journalist for the Parliament Magazine

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