China Programme • Volume 10 • Number 7 • November 2006

EU-China Trade

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The European Commission released a new EU-China trade and investment strategy on 24 October. The paper emphasised the benefits of China’s WTO accession to European investors, exporters and consumers, but also acknowledged that Chinese competition had real consequences for ‘companies and individual workers in Europe’. It highlighted a number of obstacles to market access, such as high tariffs on textiles, shoes, steel and vehicles, as well as ‘unjustifiable nontariff barriers’, including product certification, labelling standards, import approval requirements, customs delays and ‘unreasonable sanitary and health requirements’ for agricultural products.

Furthermore, the policy paper maintained that new WTO-incompatible ‘China first’ trade practices were emerging in sectors such as automobiles, steel, semiconductors and shipbuilding (the EU and the US have already launched a WTO dispute on alleged local content requirements affecting China’s tariff structure for foreign auto parts, see Bridges Year 10 No.6, page 6).

The EU will continue to press China to end what it alleges are WTO-illegal subsidies (see page 8), as well as to more effectively police and punish those who infringe copyright and trademark protections. In addition, it will address, as a priority “requirements for technology transfer that are not based on voluntary business decisions, and the non-payment of royalties to EU rightholders.”

A new EU-China Partnership and Cooperation Agreement (PCA) will be drawn up, with a ‘specific focus on trade and investment issues’ such those highlighted above. In addition, the Commission will “seek to address with greater intensity sustainability and environmental aspects and impacts of its economic and trade relations with China,” as well as step up pressure on China “to assume a responsibility commensurate with the benefits it derives from the multilateral trading system and to make a substantial contribution to reviving and completing the WTO Doha Round.”