Commentary says China will respond if EU adopts French-German trade tools
In short
France and Germany submitted an informal document to the European Commission on October 5 asking the EU to strengthen trade defence measures and add new tools, including the power to investigate other countries' overall policies, according to a Yuyuan Tantian (玉渊谭天) commentary. The commentary said that if the EU insists on discriminatory measures, China will respond firmly, and that it could use anti-discrimination and supply chain security investigations.
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France and Germany submitted an informal document to the European Commission on October 5 asking the EU to strengthen its trade defence measures and add several new tools, according to a commentary by Yuyuan Tantian (玉渊谭天) reported by CLS and also carried by China News Service and Huxiu. The commentary described the tools as protectionist and said they aim to restrict other countries' goods and companies from entering the European market, reduce supply chain dependence and prepare in advance for countermeasures. Under the current plans, it said, the EU could investigate another country's overall policies and take measures if it judged they undermined fair market conditions. [ 1 , 2 , 3 ]
The commentary said China's position was clear: if the EU insisted on introducing discriminatory measures, China would respond firmly to defend the legitimate rights of its industries. CLS reported that China could use anti-discrimination investigations and industrial and supply chain security investigations. The text carried by Huxiu added that China could coordinate with potentially affected third parties within the WTO framework and could also use investigations into the effects of foreign subsidies. An expert at the Ministry of Commerce's Chinese Academy of International Trade and Economic Cooperation said such investigations could assess whether foreign policies affect Chinese companies and create unfair competition. [ 1 , 2 ]
The article carried by Huxiu said European Commission trade and economic security commissioner Šefčovič will visit Beijing, and that the new tools had weakened the atmosphere for China-EU consultations and could narrow room for dialogue and undermine results already negotiated. It said China and the EU set up a trade and investment consultation mechanism with four working strands in June. It argued the EU asks China to open its market while restricting China itself, and said the EU has investigated Chinese wind power and security screening equipment companies under the Foreign Subsidies Regulation, limiting their access to public procurement and project financing. It also said the proposed tool's definitions, evidence and defence mechanisms are unclear and that reverse qualified majority voting would lower the threshold for using it. [ 1 ]
Yan Shaohua (严少华), deputy director of Fudan University's Center for China-EU Relations Studies, said the issues between the two sides are interconnected and called for a framework covering trade, investment, services and technology, including coordinating green technology standards and ensuring reciprocal market access. The article said existing consultations could address joint monitoring of trade flows, the electric vehicle dispute through price undertakings, Chinese investment in a non-discriminatory environment, and critical items and market access. It said trade imbalance is a long-term structural problem that short-term restrictions cannot solve. [ 1 ]
China News Service carried the piece under the Yuyuan Tantian title "China-EU economic and trade relations need to find greater consensus", the same title Huxiu used. [ 1 , 3 ]
Why it matters
The commentary says the proposed tools could narrow room for China-EU dialogue ahead of a visit to Beijing by EU trade commissioner Šefčovič and undermine results already negotiated. It also sets out investigation tools China could use in response to EU measures.
Key facts
- On October 5, France and Germany submitted an informal document to the European Commission asking the EU to strengthen trade defence measures and add several new tools. [ 1 , 2 , 3 ]
- According to the commentary, the tools aim to restrict other countries' goods and companies from entering the European market, reduce supply chain dependence and prepare in advance for countermeasures. [ 1 , 2 ]
- Under the plans described, the EU could investigate another country's overall policies and take measures if it judged they undermined fair market conditions. [ 1 , 2 ]
- The commentary said China would respond firmly if the EU insisted on introducing discriminatory measures. [ 1 , 2 ]
- China's possible tools named include anti-discrimination investigations and industrial and supply chain security investigations; Huxiu's text also lists investigations into the effects of foreign subsidies. [ 1 , 2 ]
- European Commission trade and economic security commissioner Šefčovič is due to visit Beijing. [ 1 ]
- China and the EU set up a trade and investment consultation mechanism with four working strands in June this year. [ 1 ]
Confirmed by several sources
- France and Germany submitted an informal document to the European Commission on October 5 asking the EU to strengthen trade defence measures and add new tools. [ 1 , 2 , 3 ]
- Under the proposal as described, the EU could investigate other countries' overall policies and act if it judged fair market conditions were undermined. [ 1 , 2 ]
- The commentary states that China will respond firmly if the EU insists on introducing discriminatory measures. [ 1 , 2 ]
Still unclear
- When Commissioner Šefčovič will visit Beijing. The documents say only that he will visit; no date is given.
- Whether the European Commission will take up the French-German proposals. The documents describe the proposals as being under consideration and give no Commission response.
- Claims that the tools have weakened the consultation atmosphere and lack clear definitions, evidence standards and defence mechanisms. These are assessments in the commentary carried in full only by Huxiu.
- The EU's use of the Foreign Subsidies Regulation against Chinese wind power and security screening equipment companies. Mentioned only in the article text carried by Huxiu.