Mundo 29-06-2017

European Union is about to enter into a trade war with China

The European Parliament sent to the European summit, held on June 22 and 23, a project that will tighten import rules and protect the European market of Chinese products.

Which road will the EU choose? Burying the commercial war hatchet with China or engaging in a two-pronged fight between US protectionism and Chinese dumping. This is the dilemma facing the EU now. The decision taken at the summit could affect the trade relations of the 28 member countries with the Asian power.

The European Parliament's Committee on International Trade (INTA) approved by a majority the document giving the EU greater leeway to impose customs duties on products from countries where, according to the European authorities, the State intervenes in the economy.

Although there are no explicit mentions of China in the draft, the document points out that some measures need to be taken against countries whose economic products "significantly distort the market".

According to the experts, this reference opens the way to introduce high 'antidumping' rights to products from China. There is a reserve of the Union to recognize that the Chinese economy is market. This means that prices of Chinese products, regardless of whether they are affected by dumping or not, will continue to be perceived by the EU as a second-tier country

“In Europe, they believe that, despite expressing their commitment to free trade, China is a protectionist power in foreign trade, since it prevents all forces from importing goods with a high added value from Europe to China. That is the EU's response to China, and in practice it is a trade war" says Vladislav Belov, deputy director of the Institute of Europe of the Russian Academy of Sciences.

However, it may be premature for the Chinese to worry. The fact that the EU does not recognize that China has become a market economy may not matter at all to the Asian giant.

"China is still the world's largest industrial power, its goods are highly competitive in many areas, and the variety of technological products is constantly expanding. And today Europeans are importing Chinese products, not because China is asked to do so, but because the European economy is now facing many difficulties, and in some cases, European products are unable to compete with Chinese products" said Bian Yongzu, an analyst at the Center for Financial Studies Chungyang, in his commentary for Sputnik.

In addition, it cannot be forgotten that Europe is China's largest trading partner. Therefore, the new European measures can affect more the community economy and the standard of living of Europeans themselves.

In any case, the initiative of the European Parliament, if approved at the highest level, will have to go through the process of ratification in each of the EU member countries.

Sputnik