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26 October, 2006 EU Gets Tough as Trade Deficit Widens |
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The European Commission unveiled a wide-ranging plan aimed at persuading Beijing to open more markets, crack down on the theft of technology from EU companies and pay closer attention to World Trade Organization rules. If not, says the Commission, the EU could protect its interests, including by the imposition of antidumping duties on Chinese goods. The EU already has antidumping measures in place on imports of Chinese shoes, as well as more than 30 other products.
"China needs to demonstrate its commitment to open markets, fair competition and responsible leadership," say internal EU documents that lay out the framework for the Commission's plan.
Under the plan, the EU will also ask Beijing to let its currency appreciate, a move that China's trading partners argue would reduce the size of the country's trade surplus by making Chinese goods more expensive on world markets and European and other imports cheaper in China.
The EU's trade deficit with China ballooned to 106.8 billion euros ($134.8 billion) last year from 48.6 billion euros in 2000. That's starting to approach the scale of the U.S. trade deficit with China, which in 2005 was $201.5 billion.
The Commission hopes the strategy it has outlined will eventually lead to a "reciprocal" relationship, easing the trade gap and creating new opportunities for European companies. That could be laid out in a future bilateral trade deal between the EU and China.
The EU also asked about progress on China's commitment to fully liberalize its banking sector by the end of this year. Because of the current regulatory restrictions, European banks get just 2% of the market for Chinese banking services, according to Unice, a European business lobby that represents 2.2 million businesses.
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