EU Trade Presidency Urges China to Tackle Export Barriers

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ten data blog11-08-2023

china export barriers,china export,china exports

Brussels will urge Beijing to reduce barriers to European exports at a high-level meeting in September after the EU's trade deficit with China reached almost €400 billion last year.

Valdis Dombrovskis, the EU's trade commissioner, told the FT that the "staggering" deficit, which doubled in two years, highlighted the need for Beijing to open up its markets.

"The trade relationship between China and Europe is very unbalanced. China has a huge trade surplus," Dombrovskis said in an interview. "And the degree of openness on the Chinese side is not the same as on the EU side."

His position echoes that of successive U.S. administrations. U.S. Trade Representative Kathleen Dai said China must correct the "unbalanced" relationship, which is "unhealthy" and "damaging" to the U.S. economy.

The U.S. has used tariffs and export bans to try to change Beijing's approach, but with little success. 2022 saw its imports of goods and services from China reach a record high.

Dombrovskis emphasized his desire to maintain good relations with the world's second-largest economy and hoped Beijing would raise its concerns during the China-EU high-level economic and trade dialogue in September.

In 2022, the EU's exports of goods to China will remain almost unchanged at 230 billion euros, while imports will increase to 626 billion euros, accounting for more than a fifth of the EU total.

Dombrovskis said the dialog that usually takes place between him and the Chinese vice premier would "provide an opportunity to discuss these issues and find solutions."

The Latvian also hinted that if the problems are not resolved, the EU could deploy a host of new trade weapons it has provided itself with in recent years - Brussels could even act without a formal complaint from companies.

Officials said the last time the European Commission brought a so-called "ex officio" case was more than a decade ago. "We are ready to use this toolkit if the industry complains, or if necessary," Dombrovskis said.

The EU's tools include anti-coercion tools, which allow for retaliation against trade measures, such as boycotts, aimed at forcing a change in foreign policy; the ability to block subsidized companies from investing in the EU; and the closure of countries that do not open up their government procurement markets to EU firms.

Dombrovskis emphasized that the EU is discussing "de-risking" rather than "decoupling" given China's dominance in green technologies. "We need to find ways to work with China while dealing with risks and possible strategic dependencies," he said.

He criticized Beijing's announcement this month of export restrictions on gallium and germanium, as well as metals used in chips, electric cars and a range of telecoms products. He said, "We are now analyzing these provisions and their potential impact on the supply chain and EU industry in detail, and there are indeed some concerns that these export restrictions go beyond what is needed to protect essential security interests."

The commissioner said China could only impose export controls "on the basis of relevant security considerations" and in compliance with World Trade Organization rules.

The EU is discussing the introduction of its own approach to export controls, which Dombrovskis said would focus mainly on national security.

He called on China to help breathe new life into the international trade system.

"China has benefited greatly from its accession to the WTO, but many of its practices actually distort the level playing field," he said. "It is important for China to cooperate on WTO reform because it is one of the biggest beneficiaries of the WTO and it should also be in China's interest for the system to continue to work."

Another News

Latest News Released Today: Tendata Blogs

Other Trade Data References to China Exports:

1. China's Imports and Exports Slumped Again in July

2. China's Exports Fall More Than Expected: Weakened by De-risking, Repatriation Measures

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