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Parliament urging Commission to act on China MES

Trade & Society

Parliament urging Commission to act on China MES

Unclear on China: Bernd Lange. [European Parliament]

The European Parliament has put pressure on the Commission to deliver on the promise to strengthen its trade defences to protect EU industry against China, has learned.

In a letter sent to Trade Commissioner Cecilia Malmström on Wednesday (5 October), lawmakers express their alarm.

“We have reached a point where it is likely that the co-legislator do not anymore have sufficient time available for concluding a legislating procedure before the expiry of the provisions,” writes in the letter Bernd Lange, chairman of the International Trade committee.

On 29 July, the European Commission agreed to meet its WTO obligations granting China’s Market Economy Status (MES), but at the same time it should draw up plans to “maintain a strong trade defence system” to tackle Chinese dumping and illegal subsidies.

Policymakers are struggling to find the way forward to preserve a future for the European steel industry, once the bedrock of the bloc’s industrial economy, which is currently facing the most serious crisis in its history.

Steel industry worried it will be 'collateral damage' of EU's China policy

European steel is worried that the EU will grant China Market Economy Status, sacrificing the industry in return for billions of Chinese investment to revive the bloc’s sluggish economy.

European steelmakers have marched against granting China MES for months, demanding that officials do more to stop the flood of cheap imports from Beijing.

China joined the World Trade Organization in 2001 as a developing country economy run largely by the state, but was promised a review within 15 years to win a change in status to put it on a par with its major trading partners.

Without market economy status, the WTO’s 162 member countries are much freer to slap anti-dumping measures on cheap Chinese products.

“I would be grateful if you would clarify if the Commission intends to take the necessary steps in order to amend the Union as it communicated in July,” Lange insisted.

“If this were the case, I would urge the Commission to come forward with its proposal as soon as possible, in compliance with the Parliament’s position as expressed in its resolution.”

In May, by an overwhelming majority, MEPs passed a non-binding resolution urging the Commission to listen to the concerns of EU industry and trade unions against  granting China MES in a bid to influence the EU.

The Commission has ramped up trade defences over the past year, slapping anti-dumping duties on products like reinforced bar, cold-rolled carbon steel and cold-rolled stainless steel, ranging between 18.4% and 25.3% for imports from China.

Despite that, carbon steel imports in the year to May rose 21%, with China now representing 27% of total imports, while stainless steel imports rose 17% over the period, EU data shows.