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China’s proposed market economy status: defend EU industry and jobs, urge MEPS

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13/05/2016
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View of the European Parliament in Strasbourg
View of the European Parliament in Strasbourg

Until China has fulfilled the EU's five criteria for market economy status, its exports to the EU must be treated in a "non-standard" way, say MEPs in a non-legislative resolution passed on Thursday. This non-standard methodology, for use in anti-dumping and anti-subsidy investigations, should assess whether China's costs and prices are market-based, so as to ensure a level playing field for EU industry and defend EU jobs, they add.

However, the EU must to find a way to do this in compliance with its international obligations in the World Trade Organization (WTO), and in particular China's WTO Accession Protocol, which provides for changes in how China is to be treated after 11 December 2016. In a resolution passed by 546 votes to 28, with 77 abstentions, MEPs call on the EU Commission to come forward with a proposal that strikes a balance between these needs.

Chinese impact on EU industry

MEPs urge Commission to listen to the concerns of EU industry, trade unions and stakeholders, about the possible consequences for jobs, the environment and economic growth in the EU. China’s excess production capacity and the resulting cut-price exports are already having "strong social, economic and environmental consequences in the EU", they say, pointing in particular to the EU steel sector.

MEPs point out that 56 of the EU's current 73 anti-dumping measures apply to imports from China.

China important as a partner

MEPs nonetheless stress "the importance of the EU partnership with China".  China is the EU's second biggest trading partner and with daily trade flows of over €1 billion, the Chinese market "has been the main engine of profitability for a number of EU industries and brands", they say.

MEPs strongly "oppose unilateral concession of market economy status to China", but instead ask the Commission to coordinate with other major trading partners to come to a joint interpretation of WTO law. They also urge it to use the upcoming G7 and G20 summits, as well as the EU-China Summit, to find a WTO-compatible response.

Reform EU anti-dumping law

MEPs stress the "imminent need” for a general reform of EU trade defence instruments, and call on the Council to unblock a package of proposals to modernise them on which Parliament voted its position in 2014.

Background and next steps

If the EU Commission were to propose to recognize China as market economy in EU law, Parliament would have co-decision rights with the Council.

In a recent plenary debate on how to deal with Chinese imports after 11 December 2016, EU Commissioner Vytenis Andriukaitis told MEPs that the Commission is working on a new set of rules that will include a strong trade defence system and ensure compliance with WTO rules, and  that it would debate this "before the summer recess".

Procedure:  Non-legislative resolution