The survival of European industry is at stake. While the EU has set as an objective to increase the share of industry in GDP from 15 to 20%, granting MES will result in the opposite.
On 17 March 2016 the Commission organised a conference on the topic which marks the start of its decision-making process. Moreover, an impact assessment is currently being carried out, while a written stakeholder consultation is also running. Concrete proposals (which need approval from the European Council and European Parliament) are expected by summer.
That the issue is highly sensitive was illustrated by the presence of more than 300 participants, amongst them the Chinese delegation to the EU.
In her opening address Commissioner Malmström (responsible for Trade) presented the different options:
- Doing nothing and maintaining the use of non-market methodologies. However, this will lead to a dispute settlement procedure with the WTO, which is risky. Indeed, the outcome of such a dispute settlement will be highly uncertain, while in the meantime we risk being confronted with retaliation measures from China's side.
- Granting MES to China. This will still allow us to use the normal anti-dumping procedures, which can be made more effective. Nevertheless, the consequence will be that the scope for starting anti-dumping procedures will be sharply reduced.
- Granting MES but at the same time introducing an additional package of trade defence instruments to deal better with "distorted" price-setting in China.
IndustriAll Europe was represented by Guido Nelissen, economic adviser, who argued that using internal Chinese prices will severely reduce anti-dumping margins and will make it almost impossible to tackle dumping practices in a large number of basic industrial sectors. As long as China is not a market economy according to the criteria defined by the EU, the use of alternative methodologies must be maintained. Guido, who also spoke on behalf of the ETUC and the AFL-CIO, pointed out the many risks of granting MES to China:
- The survival of European industry is at stake. While the EU has set as an objective to increase the share of industry in GDP from 15 to 20%, granting MES will result in the opposite. Many sectors risk falling below a critical threshold necessary for their survival. After having lost sectors such as consumer electronics, telecom, electronic components, solar panels, textiles and toys, the EU also risks losing basic sectors such as steel, aluminum, cement, ceramics, glass and paper. It is very dangerous to give a dominant position to China on key elements of our supply chains.
- According to an impact assessment carried out in the US, 600 000 jobs will disappear in the US due to MES for China. Are we really willing to pay such a high social price for being nice to China?
- MES for China is at odds with our climate ambitions, as moving industrial activities from highly energy- and resource efficient European factories to coal-based Chinese facilities will drastically increase greenhouse gas emissions.
- China is a new economic powerhouse entering the global economy with its own set of rules, which are not based on those of a social market economy. China has ratified only 4 out of 8 ILO Core Labour Standards. There is no freedom of association, no right to organise, no right to collective bargaining and no right to strike, while forced labour still exists for students and internal migrants. Granting MES to China will take away any incentive for China to move from a state-led to a social market economy.
For industriAll Europe, the debate will be continued in our social dialogue committees and in the EESC and the CCMI, which will organise public hearings in order to prepare Opinions.