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Peter Mandelson will warn China today that its business relationship with the EU is one-sided and needs radical change.
The Trade Commissioner will tell his Chinese counterpart that the manufacturing powerhouse faces legal sanctions over a string of unfulfilled promises.
Mr Mandelson is coming under increasing pressure from member states to get a better deal for Europe, with Nicolas Sarkozy, the French President, attacking the “naivety” of the EU trade negotiating position and insisting that the opening of its markets must take place only in exchange for reciprocal access.
Mr Mandelson, who will meet Bo Xilai, the Chinese Trade Minister, today, hinted that the EU was on the point of adopting the tough tactics of the United States, which has already demanded World Trade Organisation proceedings to settle a number of disputes.
Under Mr Mandelson’s regime, the EU has adopted a softly, softly approach, for example, negotiating a complete opening of the textile market by 2008 after taking emergency interim measures to stop Europe being swamped by cheap Chinese imports.
But yesterday he said that, eight months after agreeing a framework for a fair trade balance in talks in Beijing, he had seen no movement from China on a series of issues:
— The EU estimates that €20 billion (£13.5 billion) in trade opportunities are lost every year because of market access barriers
— China has failed to enforce protection of European intellectual property rights and accounts for 80 per cent of the counterfeit goods intercepted at EU borders
— In service areas such as tele-coms, construction, insurance and finance, EU companies are still blocked by discriminatory licensing systems
— Despite the establishment of an EU/China Steel Working Group last year, the risk of dumping is increasing with imports to the EU rising from 200 million tonnes in 2005 to 600 million in 2006.
Mr Mandelson’s change of tactics comes as figures out yesterday showed that China’s glo-bal trade surplus ballooned to $22.45 billion (£11.4 billion) in May, a jump likely to intensify calls for Beijing to let the yuan appreciate more rapidly.
Mr Mandelson said Europe’s trade deficit with the booming export giant is growing at an “intolerable” €15 million an hour. He said: “The trade deficit is neither tolerable nor inevitable,” he said yesterday in Brussels ahead of the annual EU/China joint trade ministerial meeting.
“Of course we benefit from the lower cost of many competitively priced China exports but we also know that in goods and services Europe has much to offer China and our full export potential is being hampered in the Chinese market.
“The current trade balance is artificially inflated and is a product of politics as much as of economics.
“The Chinese Government has said it cannot control production at a provincial level but even over government procurement contracts there has been little movement. We are at a crossroads – the policy of dialogue and cooperation is only credible if it delivers.
“The EU is looking for improved access to China’s goods and services market, we are also looking for a sea change in protection of EU copyrights, especially by preventing movies or music being copied or downloaded.
“If the state authorities want to keep our trade relationship on an even keel, they are going to have to do more to recognise both the misgivings that exist within Europe and they will also have to recognise easy access to our markets is going to become increasingly questioned by business and government.
“I don’t think it is in our interests to sit back and watch spiralling trade deficits lead to mounting anger and threats of action on the European side.”
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What 'movies??' Which European countries are trying to get sales of their films increased in China?? Who make any in any quantity?? I think the clue there is in the parlance. Hollywood wants to export their gore-fests into the Orient.
Fortunately, Chinese tastes do not extend to 'death for fun' obscenity spattered films or vacuous bubblegum music purveyed by semi-naked prancing bimbos. China has it's own very healthy film and music industries keenly embraced by it's population.
Rambo and Beyonce loose in China?? I shudder............
Pu Li, Guangxi,
Ewald, dont be delusional, China may be a rising economic phenomenom, but the EU is the top dog at the moment. The Chinese will have no choice but to comply with whatever the EU, and also US say, if they dont they will lose out themselves. They are currently just trying to have it both ways by being dishonest, but that cant last forever.
Granted, it is probable that throughout this century China will blast it's way to the top in terms of it's economy, but its not all plain sailing, and they will soon realise they need the EU to advance.
Mandelson is too nervous.
Mark, Bristol, England,
It's amazing how much of the Mandelson spin has entered the public psyche. I wonder how many people would question the idea that he's taken a "softly, softly" approach with China. On several occasions, he's managed to make himself look like a moderate by spinning up the China threat. But things look different when you try to filter out the spin. The obvious example is the idea that the EU textile industry was being "swamped by cheap Chinese imports". If you look closely at the actual trade figures, ignoring the third-country routing of shipments, you find that the growth in Chinese garment exports to the EU was decidedly slow. Another case is the shoe duties, where the EU's "compelling evidence" turns out to be an investigation which found that just one of the 13 factories they investigated had received a subsidised loan. Now the spin has come back to bite him. The likes of Sarkozy are pushing him to be even more protectionist and he's got very little to bring to the negotiating table
Tim Wilson, Cheltenham, UK
CHINA IS A GLOBAL FACTORY don't be fooled by cheap
prices ,as the Chinese grow we lose our manufacturing
base and power to control our own way of life,in America and Europe ,1000,s of jobs are lost every week ,we need
to wake up to the problem NOW .FAIR TRADE NOT NO
TRADE .
george william taylor, HULL, UK
It's amazing how much of the Mandelson spin has entered the public psyche. I wonder how many people would question the idea that he's taken a "softly, softly" approach with China. On several occasions, he's managed to make himself look like a moderate by spinning up the China threat. But things look different when you try to filter out the spin. The obvious example is the idea that the EU textile industry was being "swamped by cheap Chinese imports". If you look closely at the actual trade figures, filtering out the transshipment of goods, you find that the growth in Chinese garment exports to the EU was decidedly slow. Another example is the shoe duties, where the EU's "compelling evidence" turns out to be an investigation which found that just one of the 13 factories they investigated had received a subsidised loan.
Now the spin has come back to bite him. The likes of Sarkozy are pushing him to be even more protectionist and he'd got nothing to bring to the negotiating table.
Tim Wilson, Cheltenham, UK
The Chinese did not "naturally" evolve into a leading exporter.
Mary Catherine, Elmhurst, US
Good Luck Mr.Bo Xilai,
European full export potential is not being hampered in the Chinese market, at all,some is simply no good!
Don't give in to Peter Mandelson,better aske him why he was kicked out of Blairs government, this man is a discrase for Europe and should not speak in the good name of European people,specially not for Germany!!!
They can't prevent movies or music being copied or downloaded themselvs in there own countries,its easier to blame China and party all night,don't work,inflate Housprices,live of the increase in Equity and cheat the rest of your hard working people in China.Soon here in China we will produce the best quality products worldwide,due to the better edjucation thanks to you,and we can choose to whome we want to sell,soon they will beg Chinese companies for there best and exelent products and services.
In some cases they do it already.
ewald widiner, Shanghai, China
This is the chap who brought us the Dome. I remember a TV documentary around it, largely featuring Mandy and the many meetings held prior and during its construction, where he "enjoyed making decisions". I wish they'd repeat it so that we could have our appreciation of the chap refreshed.
He has absolutely no experience of (or aptitude for) running a business & I think the Chinese know this. Who on earth is he to make demands of anybody, let alone a nation that has achieved a most remarkable transformation? He should stick to getting visas fast tracked and enjoying the privileges of the Euro trough.
Ray, Dartmouth,
Absolute nonsense as usual from Mandelson and the EU in general. Cheap Chinese imports/labour are supporting his (and my) lifestyle and property values. If the EU are to mess with this - beware, you are warned. Watch your interest rates leap to the 8% or so they deserve to be at. Just let the Chinese evovle into a consumer society as we have -over time, let it happen 'naturally' you can't mess with the market anyway with short term palliatives to appease certain sections of you electorate.
victor, Malaga, Spain
China and Russia have the EU over a barrel. China takes all those factories so Europeans can be green and sit around debating the environment and importing manufactured goods. The Russians provide the energy raw material so noone has to bother with power stations in Europe.
To save time on babies Europeans import them rather than make their own.
Europe is the epitome of "civilisation" as embodied in The Glass Bead Game - all talk, no action and condescending superiority towards those who make and export.
China miht as well tell the EU to run along and to stop using raw materials China needs on her upward path to global hegemony
TomTom, Leeds, England
China and Russia have the EU over a barrel. China takes all those factories so Europeans can be green and sit around debating the environment and importing manufactured goods. The Russians provide the energy raw material so noone has to bother with power stations in Europe.
To save time on babies Europeans import them rather than make their own.
Europe is the epitome of "civilisation" as embodied in The Glass Bead Game - all talk, no action and condescending superiority towards those who make and export.
China miht as well tell the EU to run along and to stop using raw materials China needs on her upward path to global hegemony
TomTom, Leeds, England