Abstract
This Selected Issues paper on Euro Area Policies underlies global rebalancing of accounts. From a growth-accounting perspective, slower growth in the capital-labor ratio seems to be the main driver behind the deceleration in labor productivity. The increase in bilateral trade was accompanied by a large bilateral EU trade deficit. China’s market share seems to have increased mainly at the expense of other East Asian countries. EU trade with China increased at more than twice the rate of total EU external trade, and China became the EU’s second largest trading partner.
V. The Changing Patterns Of Eu-China Trade72
Core Questions, Issues, and Findings
What are the recent trends in EU-China trade? In 1988, China was the EU’s tenth largest trading partner. Over the last fifteen years, bilateral trade in goods has increased sharply, and China has become the EU’s second-largest trading partner (after the United States). (¶2-3)
What have been the implications for the EU and third countries? The increase in bilateral trade was accompanied by a large bilateral EU trade deficit. China’s market share seems to have increased mainly at the expense of other East Asian countries. (¶4-5)
What happened to the composition of bilateral trade? China’s exports have diversified over the past two decades, mainly from traditional goods (including toys and textiles and clothing) to more sophisticated goods (including electronics). (¶7)
What are the main driving forces behind trade developments in electronics and textiles? The rapid growth of electronics exports to the EU highlights China’s shift to more sophisticated goods and seems in part driven by FDI flows and China’s industrial policies. As regards textiles and clothing, China’s EU market share is also increasing. In particular, the phasing out of some textiles quotas in 2002 led to a sharp increase in imports from China that have displaced other suppliers (but not domestic production). This suggests that the elimination of the remaining textile quotas by 2005 could trigger a further import surge. (¶8-14)
What are the major issues driving EU-China trade disputes? The bilateral trade deficit is not a major issue but could play a role in the future. Disputes have so far been limited and are related to adjustment pressures in some industries, access to raw materials, and more importantly, to the implementation of China’s WTO commitments. (¶15-18)
What is the EU strategy to deal with trade tensions? The EU has emphasized dialogue, technical assistance and a focus on implementation of China’s WTO commitments. It has refrained from imposing sanctions or safeguards, but it has resorted to antidumping measures. (¶19-20)
A. Introduction
217. Over the past decade, EU trade with China increased at more than twice the rate of total EU external trade and China became the EU’s second largest trading partner. This chapter takes stock of the rapid increase in EU-China trade; analyses the diversification of Chinese exports to the EU with a focus on electronics and textiles; and, finally, describes current and potential trade disputes and the EU strategy to prevent and resolve differences.
B. Developments in Bilateral Trade
218. Illustrating the sharp increase in bilateral trade, China became in 2003 the EU’s second largest trading partner. Fifteen years ago, China accounted for 1.7 percent of EU external trade.73 However, over 1988-2003, EU-China trade has increased on average by 17 percent every year compared to 7 percent for total EU external trade. As a result, China’s share in the EU’s external trade currently reaches 7 percent (9 percent of EU imports and 4 percent of its exports; Figure 1) and China, which was EU’s tenth largest trading partner in 1988, became, in 2003, its second largest trading partner after the United States, overtaking Japan in 2002 and Switzerland in 2003. Conversely, the EU accounted for 14 percent of China’s trade in 2002 and was its third-largest trading partner.
China Market Share in EU External T rade of Goods
(In percent) 1/
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund staff estimates.1/ Excludes intra-EU trade; EU(12) until 1992, EU (15) after.219. Developments in trade flows differ across EU-15 members. All EU-15 members experienced a substantial increase in their trade with China. However, China’s share in total trade is very different across EU members ranging, in 2003, from 3½ percent for Ireland and Portugal to 9½ percent for the Netherlands. For imports, it ranges from 4 percent for Portugal to more than 13 percent for the Netherlands and, for exports, from 1 percent for Greece to 6 percent for Germany and Finland (Table 1).
Trade Flows Between EU Countries and China
(In percent)
Trade Flows Between EU Countries and China
(In percent)
| Imports of Goods from China (Percent of total imports) |
Exports of Goods to China (Percent of total exports) |
|||
|---|---|---|---|---|
| 1995 | 2003 | 1995 | 2003 | |
| EU | 4.8 | 9.7 | 2.6 | 4.1 |
| Austria | 3.7 | 5.5 | 2.3 | 2.8 |
| Belgium | 4.4 | 11.2 | 2.2 | 4.0 |
| Denmark | 5.8 | 11.6 | 1.5 | 3.2 |
| Finland | 3.2 | 8.1 | 3.3 | 5.9 |
| France | 4.4 | 8.4 | 2.4 | 3.6 |
| Germany | 5.7 | 9.4 | 3.4 | 6.2 |
| Greece | 4.9 | 6.8 | 0.4 | 0.9 |
| Ireland | 2.4 | 6.0 | 0.3 | 1.8 |
| Italy | 4.9 | 8.6 | 2.6 | 3.2 |
| Netherlands | 3.7 | 13.2 | 2.0 | 2.8 |
| Portugal | 2.3 | 4.0 | 0.7 | 2.6 |
| Spain | 5.3 | 9.3 | 2.9 | 2.8 |
| Sweden | 5.3 | 8.9 | 3.4 | 4.7 |
| United Kingdom | 4.9 | 10.6 | 1.3 | 2.4 |
Trade Flows Between EU Countries and China
(In percent)
| Imports of Goods from China (Percent of total imports) |
Exports of Goods to China (Percent of total exports) |
|||
|---|---|---|---|---|
| 1995 | 2003 | 1995 | 2003 | |
| EU | 4.8 | 9.7 | 2.6 | 4.1 |
| Austria | 3.7 | 5.5 | 2.3 | 2.8 |
| Belgium | 4.4 | 11.2 | 2.2 | 4.0 |
| Denmark | 5.8 | 11.6 | 1.5 | 3.2 |
| Finland | 3.2 | 8.1 | 3.3 | 5.9 |
| France | 4.4 | 8.4 | 2.4 | 3.6 |
| Germany | 5.7 | 9.4 | 3.4 | 6.2 |
| Greece | 4.9 | 6.8 | 0.4 | 0.9 |
| Ireland | 2.4 | 6.0 | 0.3 | 1.8 |
| Italy | 4.9 | 8.6 | 2.6 | 3.2 |
| Netherlands | 3.7 | 13.2 | 2.0 | 2.8 |
| Portugal | 2.3 | 4.0 | 0.7 | 2.6 |
| Spain | 5.3 | 9.3 | 2.9 | 2.8 |
| Sweden | 5.3 | 8.9 | 3.4 | 4.7 |
| United Kingdom | 4.9 | 10.6 | 1.3 | 2.4 |
220. The increase in bilateral trade was accompanied by a widening trade deficit. While bilateral trade in goods was balanced in 1980, since 1998 the EU’s trade deficit with China has been persistently above 40 percent of bilateral trade (Figure 2).74 The deficit reached €47.7 billion in 2002 and €55.3 billion in 2003. This constitutes by far the EU’s largest bilateral trade deficit with any trading partner. At the same time, in 2002, the EU registered a small trade surplus of €0.6 million in trade in services with China.
EU’s Trade Deficit with China and East Asia
(Percent of bilateral trade)
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund staff estimates.1/East Asia includes ASEAN, China, Hong Kong SAR, Taiwan, Province of China, South Korea, and Japan.221. China’s market share seems to have increased at the expense of other East Asian countries. Until 1998, the increase in China’s market share did not prevent the increase in market penetration by East Asian countries (Figure 3). However, during 1998–2003, East Asian countries experienced a continuous drop in their market share. The evolution of the trade deficit with East Asian countries (including China) also suggests that trade with China may have replaced trade with other East Asian countries (Figure 2). Despite fluctuations, the deficit with East Asian countries remains, as a share of total bilateral trade, similar in 2003 as it was in 1988 while, over the same period, the bilateral deficit with China jumped from 10 to 41 percent.75
East Asian Market Share
(Percent of EU imports)
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund staff estimates.1/ East Asia includes ASEAN, China, Hong Kong SAR, Taiwan, Province of China, South Korea, and Japan.C. Developments in Trade Composition: The Case of Electronics and Textiles
222. Chinese exports have experienced a substantial diversification as illustrated by trade in textiles and electronics goods. Over the past two decades, Chinese exports have diversified from goods like toys and textiles and clothing to electronics goods (Oxford Analytica, 2004). This section analyses EU-China trade in both electronics and textiles, which accounts for one-third of EU-China trade and about 40 percent of EU imports from China and raises a host of policy issues.
223. EU imports of electronics from China have surged recently. Over 1995–2000, China’s market share in EU imports of electronics increased from 5 to 9½ percent and then more than doubled over the following three years to reach almost 20 percent in 2003. The share of China in total EU exports of electronics increased from 1 to 4 percent in the first half of the 1990s and stagnated thereafter (Figure 4).
Share of China in EU Trade in Electronic Goods
(In percent) 1/
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund staff estimates.1/ Extra-EU trade only; EU(12) until 1994.224. The change in the structure of EU imports of electronics illustrates the rapid technological improvement of China’s exports. Consumer electronics, which were responsible for about 80 percent of EU imports of electronics from China in 1988, represented only 20 percent in 2003. Over the same period, the share of computer and office equipment increased from 8 to 54 percent (Figure 5), driven by an increase of parts and accessories and peripherals in the 1990s and, recently, data processing machines (Figure 6a). Although China remains largely dependent on high tech components, 76 Chinese exports of components also moved up the technology ladder, namely from passive to active components (Figure 6b). Similarly, exports of telecom equipment moved from terminals to transmission equipment (Figure 6c) and exports of consumer electronics from audio to video products (Figure 6d).
Change in Pattern of EU Imports of Electronics from China
(in percent of imports)
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund staff estimates.Structure Change in EU Imports of Computers and Office Machines from China
(In percent)
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund Staff estimates.Structure Change in EU Imports of Components from China
(In percent)
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund staff estimates.Structure Change in EU Imports of Telecommunications Equipment from China
(In percent)
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund staff estimates.Structure Change in EU Imports of Consumer Electronics from China
(In percent)
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund staff estimates.225. The increased sophistication in Chinese production and exports seems partly driven by governmental policies and FDI inflows. China’s government supports the production of electronics and encourages transfer of technologies through foreign investment. WTO accession, may also have played a role because trade liberalization and improved market access for Chinese exporters may have stimulated FDI inflows and in turn transfers of technologies. In the Ninth Five Year Plan (1996-2000), the electronic sector was declared a “pillar industry.” Several state-owned enterprises were selected and benefited from important support. In addition, the government launched several large research programs and projects that aimed at improving the IT infrastructure (U.S. Department of Commerce, 1997a, 1997b; and Hallaert, 1998). The Chinese government also tried, although less successfully, to promote the components industry. For example, semiconductor manufacturing has been identified as one of the key high-tech industries for development in the Tenth Five-Year Plan (2001–05). In order to help domestic production and foster technological transfers, chips produced and designed in China benefit from tax rebates. However, this policy has been recently challenged at the WTO, with the United States claiming that tax rebates discriminate against imported semiconductors and are inconsistent with WTO rules. The EU, referring to substantial trade interests, has requested the right to participate in the consultation between the United States and China.
226. FDI led to a relocation of production of electronics to China at the expense of other East Asian countries. As early as 1995, joint ventures with foreign partners were responsible for 21 percent of the sector’s output and 55 percent of exports (Directory of China Electronics Industry ’96, 1997).77 Many electronics firms, mostly from East Asia, have indeed relocated their production facilities to mainland China. As a result, the increase in China’s market share has been accompanied by a decline in other East Asian countries’ market share. While the share of East Asia (including China) in EU imports of electronics goods was stable over 1995–2002 at about 28 percent, the share of East Asia excluding China dropped from 26 percent to 21 percent.78
227. Diversification of China’s exports led to a decrease in the share of traditional exports such as textiles and clothing in EU imports from China. Despite a healthy annual growth rate of 12½ percent on average over 1995–2003, EU imports of textiles and clothing, constrained by bilateral quotas, increased more slowly than other imports from China (18 percent). As a result, the share of textiles and clothing declined from 18 percent to 13 percent.
228. Nevertheless, China’s share in EU imports of textiles and clothing is increasing rapidly. EU imports of textiles and clothing from China are growing more rapidly than total EU imports of these products from other countries (12½ percent compared with 4½ percent over 1995-2003), reflected in a substantial increase in the share of China in EU imports (Figure 7).
China’s Share in EU Imports of Textiles
(In percent)
Citation: IMF Staff Country Reports 2004, 235; 10.5089/9781451812954.002.A005
Source: Fund staff estimates229. China’s textile exports have displaced other suppliers. In 2002, as part of the WTO Agreement on Textiles and Clothing, the EU eliminated some of its bilateral quotas on textiles. However, the liberalization did not lead to a surge in the aggregate value of imports but instead resulted in a change in the sources of imports. Over 2001–03, the total value of EU imports of textile products declined by 3 percent, while EU imports from China grew by 18 percent. The growth in China’s exports displaced other suppliers, in particular East Asian countries: EU imports of textiles from ASEAN countries as well as from Hong Kong SAR dropped by about 20 percent (Figure 7). More specifically, imports from China of textile products on which China used to face quota controls increased by 46 percent in value in 2002 and, due to a drop in the average price by 50 percent, the volume surged by about 190 percent. For the same products, EU imports from other countries dropped by 13 percent in value and 11 percent in volume due to a smaller decline in unit prices (European Commission, 2003a).79
230. The elimination of remaining textiles quotas by the end of 2004 is likely to result in another expansion of China’s textile and clothing exports to the EU. MFA Quotas still limit half of Chinese exports of textiles and clothing to the EU. About 60 percent of these quotas are utilized at more than 90 percent. This illustrates the restrictive impact of the quotas and suggests that their elimination is likely to lead to a further increase in Chinese exports. However, safeguard mechanisms under China’s WTO accession allow countries to continue with temporary quotas on textile imports from China, which, if they are invoked, may spread out the adjustment process.
D. EU-China Trade Disputes and Trade Dialogue
231. The bilateral trade deficit is “not yet” a major issue. 80 One reason mentioned is that the EU does not have a large overall trade deficit. However, the EU has warned that pressure was mounting (Lamy, 2003, and McLaughlin, 2004). Illustrating the growing concerns, both the joint statement of the sixth annual China-EU summit of October 2003 and the policy document on EU relations with China published by the European Commission in 2003 stressed the importance “to ensure continued and balanced growth of two-way trade” (European Commission, 2003b; Delegation of the European Commission to China, 2003).
232. Although import competition is only one factor driving adjustment pressures faced by some European industries, including the textiles industry, a surge in imports from China could prompt protectionist pressures. In 2001–02, production and employment in the European textiles and clothing industry declined by about 8½ percent. The adjustment proved difficult because the textile industry tends to be concentrated in some regions that are highly dependent upon the sector for employment and where other employment opportunities are limited (European Commission, 2003a). The recent increase in imports from China may have contributed to, but does not explain the contraction of the European industry. The decline started several decades ago not only because of the emergence of other international competitors, but also because of technological changes, the evolution of production costs, and the relocation of production facilities mainly in the Euro-Mediterranean zone. Nonetheless, demands for protection are building up. EURATEX, the European textile lobby, asked recently the European Commission to adopt safeguard measures against imports from China before the end of 2004 citing the possibility of massive job losses (European Report, 2004). And the European Commission, characterizing the situation as “alarming,” indicated that, if China’s imports surge after the elimination of the remaining quotas, as they did after the previous eliminations of quotas, this could lead to a proliferation of safeguard measures (Lamy, 2004).
233. However, EU policies have been directed primarily at improving access to the Chinese market rather than at shielding domestic industries from competition. Ensuring full and timely implementation of China’s WTO commitments is one of the European Commission’s key priorities (European Commission, 2003b). Both in the context of the WTO and of bilateral meetings, the EU has expressed concerns about the allocation of quotas and tariff-rate quotas, about new regulations that limit the effective opening up of services sectors such as financial services, telecommunication, retail, and construction, as well as about problems in the enforcement of intellectual property rights and international standards.81
234. Access to some raw materials has emerged recently as an issue in EU-China trade relation. For example, the EU has complained about China’s restriction of coke exports, a major raw material for steelmakers. Recently, China, which supplies one third of EU coke imports, restricted its exports in order to limit the environmental impact of coke production and to ensure supply to its growing steel industry. As a result, prices skyrocketed and some steel plants in Europe were forced to close. The EU announced it was considering launching a WTO action. However, a bilateral agreement was reached before the procedure was launched. As a result of the agreement, in 2004, the European industry will get at least the same volume of coke as during the previous year, and the EU and China will work together to eliminate the export license system by the end of 2004.
235. The EU and China have set up several dialogue mechanisms to resolve trade tensions. Several dialogue mechanisms on policy and regulation have been set up in order to deal as smoothly as possible with trade disputes and implementation of WTO commitments. These mechanisms include a customs cooperation agreement, which will help curb the trade in counterfeit goods; a EU-China trade policy dialogue, which will facilitate exchanges of views on multilateral, bilateral, and regional trade issues; a high-level dialogue on textiles trade, which will deal with the impact of the elimination of remaining MFA quotas; a dialogue on intellectual property; a dialogue on industrial policy, etc. (European Commission, 2003b and 2004a; Joint Press Statement; 2003; and Lamy, 2004). In addition, the EU provides technical assistance to support China’s integration into the world economy and to assist the Chinese government in implementing its commitments in the WTO.82
236. In this context, the EU has refrained from imposing sanctions, safeguards, or launching WTO dispute procedures, but it has taken recourse to antidumping measures. According to the WTO, during 1995–2003, 17 percent of the antidumping measures taken by WTO members and 16 percent of EU measures (14 percent of initiations of antidumping actions) targeted China (Table 2).83 Anti dumping measures only affect a small share of EU imports, but because they target specific sectors or firms they can affect competition and creates uncertainty for exporters. As a result, China’s main goal in bilateral discussions on trade has been to persuade the EU to grant China full market economy status. This status would generally provide China with a stronger position in antidumping actions. In a preliminary assessment at the end of June 2004, the Commission, however, rejected the request, arguing that China does not yet meet all the requirements of a full market economy (European Commission, 2003b and 2004b).
Initiations of Antidumping Actions Against China, 1995-2003 1/
Period ranging from July 1-June 30 for each year covered.
Country initiating antidumping action.
Initiations of Antidumping Actions Against China, 1995-2003 1/
| Year | United States 2/ | European Union 2/ | India 2/ | Other 2/ | |
|---|---|---|---|---|---|
| 1995 | 7 | 3 | 3 | 14 | |
| 1996 | 3 | 6 | 2 | 19 | |
| 1997 | 4 | 3 | 2 | 22 | |
| 1998 | 1 | 5 | 4 | 17 | |
| 1999 | 3 | 4 | 4 | 10 | |
| 2000 | 2 | 11 | 3 | 10 | |
| 2001 | 11 | 3 | 13 | 25 | |
| 2002 | 7 | 3 | 12 | 24 | |
| 2003 | 7 | 3 | 13 | 19 | |
| Total | 45 | 41 | 56 | 160 | |
Period ranging from July 1-June 30 for each year covered.
Country initiating antidumping action.
Initiations of Antidumping Actions Against China, 1995-2003 1/
| Year | United States 2/ | European Union 2/ | India 2/ | Other 2/ | |
|---|---|---|---|---|---|
| 1995 | 7 | 3 | 3 | 14 | |
| 1996 | 3 | 6 | 2 | 19 | |
| 1997 | 4 | 3 | 2 | 22 | |
| 1998 | 1 | 5 | 4 | 17 | |
| 1999 | 3 | 4 | 4 | 10 | |
| 2000 | 2 | 11 | 3 | 10 | |
| 2001 | 11 | 3 | 13 | 25 | |
| 2002 | 7 | 3 | 12 | 24 | |
| 2003 | 7 | 3 | 13 | 19 | |
| Total | 45 | 41 | 56 | 160 | |
Period ranging from July 1-June 30 for each year covered.
Country initiating antidumping action.
References
Delegation of the European Commission to China, 2003, Joint Press Statement of the Sixth China EU Summit, available via the internet at: http://www.delchn.cec.eu.int/en/whatsnew/summit.htm.
Directory of China Electronic Industry ‘96, 1997 (Beijing).
“EU/China: European Textile Group Appeals for Action Against Imports,” 2004, European Report, January 17.
European Commission, 2003a, “The Future of the Textiles and Clothing Sector in the Enlarged European Union,” Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, COM(2003) 649 (Final), October 29. Available via the Internet at: http://europa.eu.int/comm/enterprise/textile/com2003.htm.
European Commission, 2003b, A Maturing Partnership—Shared Interests and Challenges in EU-China Relations, Commission Policy Paper for Transmission to the Council and the European Parliament, COM(2003) 533 (Final), October 9. Available via the Internet at: http://europa.eu.int/comm/enterprise/enterprise_policy/gov_relations/china/com533.pdf.
European Commission, 2004, China-Trade: Launch of EU-China Trade Policy Dialogue, IP/04/605, May 5 (Brussels). Available via the Internet at: http://wlsprod.cc.cec.eu.int:7611/rapid/pressReleasesAction.do?reference=IP/04/605&for mat=HTML&aged=0&language=EN&guiLanguage=en.
European Commission, 2004b, China-Market Economy Status in Trade Defense Investigations. June (Brussels). Available via the Internet at: http://europa.eu.int/comm/trade/issues/bilateral/countries/china/pr280604_en.htm.
Hallaert, Jean-Jacques, 1998, Les Relations Sino-Européennes Concernant l’Industrie Électronique, GEM de Sciences-Po, unpublished.
Lamy, Pascal, 2003, “EU-China Relations: Continuity and Changes,” address at the EU Chamber of Commerce in China, October 31. Available via the Internet at: http://europa.eu.int/comm/commissioners/lamy/speeches_articles/spla197_en.htm.
Lamy, Pascal, 2004, “Liberalizing Textiles Trade—Rising to the Challenge of Change,” address at the PES Group Seminar, European Parliament, Brussels, March 25. Available via the Internet at: http://europa.eu.int/comm/commissioners/lamy/speeches_articles/spla219_en.htm.
McLaughlin, Kathleen, 2004, “EC’s Prodi Says China Carries Responsibility; EU Rules on Market Economy Status in June,” International Trade Reporter, April 22, pp. 695–6. Oxford Analytica, 2003, “Foreign Entrants to Aid Semiconductor Industry,” July 2.
McLaughlin, Kathleen, 2004, “China: A Five-Year Outlook (A Multi-Client Study),” March 30–31.
U.S. Department of Commerce, 1997a, China’s National Information Infrastructure Projects (The Golden Projects), International Trade Administration, Office of Computers and Business Equipment, June.
U.S. Department of Commerce, 1997b, Information Technology Overview, Commercial Service Hong Kong, August.
Zhang Jin, 2004, “Report Supports Market Status,” China Daily, June 9, page 11.
Prepared by Jean-Jacques Hallaert.
Comext database, Eurostat. The EU refers to EU(15) and prior to 1995 to EU(12).
The situation varies across EU-15 countries. Except Finland, who register a shrinking bilateral surplus, all EU countries face a deficit ranging from 7 percent of bilateral trade for Sweden to 92 percent for Greece.
During 1988–96, the trade deficit with China increased by 24 percentage points, while the deficit with East Asian countries dropped from 18 percentage points. The degradation in 1997–98 is likely to be more the result of the Asian crisis than driven by China’s bilateral deficit.
China produced in 2003 about 12 percent of its domestic needs of semiconductors (Oxford Analytica, 2003).
In 2002, foreign-funded enterprises were responsible for about 52 percent of China’s total exports (Oxford Analytica, 2004). Over the past five years, the EU was the largest foreign investor in China (excluding Hong Kong SAR) and, according to EU statistics, the stock of EU foreign direct investment reached €20.3 billion at the end of 2002.
Estimates based on Comtrade data at HS-6 digits basis. Therefore, the results are not fully comparable (the product coverage is larger) to estimates based on the Comext database.
The difference in unit prices is due to the alignment of Chinese prices toward average prices of EU imports, not to undercutting other imports. This provides another illustration of the restrictiveness of the quotas.
For example, Commissioner Lamy declared, “Has the EU trade deficit now become a political problem, as it evidently has in the US? In my view, not yet.”
For more details, see Lamy (2003).
In 2004, an EU-China Cooperation Program was launched. It followed a pilot program that ended in 2003. With funding of €20 million, the program has six components: customs and import/export regulatory system; agriculture and agro-food; technical barriers to trade and sanitary and phytosanitary measures; services; legislative and legal aspects of domestic implementation; IPR enforcement; and policy development, cooperation and transparency.
Currently, the EU has 32 definitive antidumping measures in force and 22 investigations. According to Chinese experts, as of February 2004, China was facing 600 antidumping measures (Zhang, 2004). Detailed statistics can be found on the WTO website at http://www.wto.org/english/tratop_e/adp_e/adp_e.htm and on the European Commission website at http://europa.eu.int/comm/trade/issues/respectrules/anti_dumping/stats.htm.
