EUROPEAN FOREIGN POLICY SCORECARD 2014

Trade liberalisation and overall partnership

3 - Trade disputes with China

Grade: B-
Unity 3/5
Resources 4/5
Outcome 5/10
Total 12/20
Scorecard 2012: B- (11/20)

As the European Commission initiated new important anti-dumping investigations, China sought the support of individual EU member states.

Trade Commissioner Karel De Gucht has emphasised on many occasions that Europe would continue to take necessary actions to combat unfair trading practices through dispute-settlement procedures in the WTO or domestic trade defence measures. The Commission has the power to investigate trade complaints and impose punitive tariffs, but such decisions have to be approved by member states. In practice, this gives China the possibility to pressure individual governments to oppose the measures.

As well as the solar panel dispute (see component 4), there were other trade disputes pending or initiated by the EU or China in 2013. In February, a WTO panel confirmed that China’s anti-dumping duties on X-ray security scanners from the EU were in breach of WTO anti-dumping rules. These duties had been imposed by China in January 2011, after the EU had decided to impose anti-dumping duties on cargo scanners from China in June 2010 – making it look like a retaliatory action against the EU. The EU also challenged WTO anti-dumping duties (introduced in November 2012) on solderless steel tubes from the EU, a key sub-component for nuclear plants where China now seeks a commanding position. In 2013, China threatened to impose anti-dumping duties on imports of selected products from the EU such as wine and luxury cars, but did not proceed after the solar panel dispute was settled. Important European Commission investigations continued into subsidies to China’s telecom industry giants Huawei and ZTE.

During meetings with officials from member states in 2013, China often raised the issue of trade disputes, indirectly or directly asking member states for amicable settlements. Unwilling to jeopardise their bilateral relations and afraid of retaliatory measures by China, member states became less vocal in support of EU measures against Chinese imports. In particular, David Cameron systematically undercut the European Commission and promoted Britain as far more progressive on trade than other EU member states during his trip to Beijing in December.