Eurofer is calling on European policymakers to take a long and hard look at the ramifications of granting China market economy status – of MES.
On the day that the European Parliament debated the subject of MES for China, EUROFER’s director-general Axel Eggert insisted that China is not yet a market economy and that there is still too much state involvement.
“The EU has set out five criteria establishing how China could be considered to be a market economy. Presently, the country meets just one of these conditions,” he said.
According to Eggert, China is placing political pressure on national and EU policymakers to prematurely grant MES, arguing that the WTO protocol assures its MES by the year end. “However, the WTO protocol was established under the presumption that China would make sufficient progress towards becoming a market economy; progress that it has studiously failed to implement,” Eggert said.
EUROFER argues that if China was granted MES, the anti-dumping measures that safeguard hundreds of thousands of EU jobs against China’s unfair competition across a range of strategic EU industries would become ineffective. The EU’s other trade defence measures are either inoperative or simply insufficient to defend against the rising tide of dumped Chinese products, particularly steel.
Eggert concluded, “Despite those that believe the EU must give China favourable terms, the fact remains that China already has a favourable commercial position: the EU’s total goods trade deficit with China was around 137 billion Euros in 2014, a figure expected to grow 30% larger for 2015.”
He said that the EU must think long and hard about the political direction of the EU’s trade relations with China or face the potential demise of the sector on which Europe was built – the European steel industry.