in-depth analysis | what is the key to the china-eu electric vehicle anti-subsidy consultation? what are the possibilities?
2024-09-18
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on the 13th, the spokesperson of the ministry of commerce answered reporters' questions about the european commission's intention to reject the price commitment solution submitted by the chinese industry in the eu electric vehicle anti-subsidy case.
according to the ministry of commerce website, on september 12, a spokesperson for the european commission stated that the price commitment solutions submitted by the china chamber of machinery and electrical commerce and all electric vehicle manufacturers in the eu electric vehicle anti-subsidy case did not meet the requirements, and the eu intends to reject the relevant price commitment applications.
in response, a spokesperson for the ministry of commerce said that the european commission has ignored the sincerity and efforts of the chinese industry and proposed to reject the flexible solution suggestions put forward by the chinese industry without in-depth communication. china is deeply disappointed by this.
the spokesperson said,the key to the current negotiations lies in whether the european side really has the political will to resolve the issue.china urges the eu to earnestly implement the important consensus reached at the trilateral meeting of the leaders of china, france and the eu on properly handling economic and trade frictions through dialogue and consultation, show sincerity and take action, and seriously consider the reasonable concerns of the chinese industry.
"china has both the utmost sincerity in properly resolving differences through dialogue and consultation and the utmost determination to safeguard the legitimate rights and interests of chinese companies. china will closely follow the eu's subsequent developments and will take all necessary measures to firmly defend the legitimate rights and interests of chinese companies," the spokesperson said.
liang ming, director and researcher of the institute of foreign trade of the ministry of commerce, told the first financial reporter that in recent years, the world economy has been sluggish in recovery, the great changes that have not been seen in a century have accelerated, and global trade protectionism has continued to spread. the trade disputes caused by this have emerged one after another, and have shown the characteristics of large number, strong intensity and long-term nature. china has always been the primary target country for trade remedy investigations. as the world's largest trading country, it has become a "new normal" in my country's economic development process to constantly encounter trade frictions from other economies.
tu xinquan, dean and professor of the china world trade organization (wto) research institute of the university of international business and economics, told the first financial reporter: "fundamentally speaking, improving one's own competitiveness is the key. good products will eventually meet market demand, and china's new energy vehicles are an industry with huge potential. although it is currently facing some trade frictions and other issues, it still has a very broad space for development in the global market."
what is consultation and negotiation?
he yongqian, spokesperson of the ministry of commerce, revealed at a regular press conference held on the 12th that minister of commerce wang wentao will visit europe in the near future and will hold talks with valdis dombrovskis, executive vice president and trade commissioner of the european commission, on september 19 to discuss the eu's anti-subsidy case against china's electric vehicles.
cui fan, a professor at the school of international economics and trade of the university of international business and economics, told the first financial daily that consultation and negotiation is one of the ways to deal with trade frictions. for example, in trade remedy cases, there may be consultations and negotiations between the trade remedy investigation agency and the investigated enterprise, as well as communication and consultation between the two governments.
cui fan introduced that sometimes through consultation, trade remedy investigations may be closed with price commitments or minimum prices. consultations may be conducted simultaneously with the trade remedy investigation process. however, even after the final ruling of the trade remedy investigation is issued, it does not necessarily mean the failure and end of the consultation. in the past, there have been cases where the two parties finally reached an agreement through consultation after the final ruling was issued.
for example, in 2004, the eu launched an anti-dumping investigation on castings from china. in july 2005, the eu issued a notice that it had made a positive final ruling on the case and decided to impose anti-dumping duties on the chinese products involved. however, after several rounds of negotiations, more than half a year after the final ruling, the china chamber of commerce of machinery and electronics reached a price commitment agreement with the european commission on behalf of the companies involved.
cui fan added that if long-term consultations fail to reach an agreement, the two sides may enter into litigation procedures. for example, the company under investigation and subject to measures may sue the investigating authority in the court through its domestic litigation channels in the country of investigation. for some cases with a greater impact, the government of the investigated party may also initiate dispute settlement in the wto against the government of the party implementing trade remedies. in the process of wto dispute settlement, the two sides first need to negotiate and then enter the expert group arbitration procedure. in the entire wto dispute settlement process, there is the possibility of simultaneous consultations.
for example, since the 1990s, the united states and europe have accused each other of providing illegal subsidies to their respective aircraft manufacturing industries. in october 2004, the united states and europe simultaneously requested consultations with the wto on large aircraft trade subsidy measures. after the consultations failed, the united states unilaterally withdrew from the 1992 civil aircraft trade agreement. in the same year, the united states and the european community successively sued each other in the wto for providing unfair subsidies to their respective aviation companies.
“whether it is negotiation and consultation, domestic litigation mechanism, or wto dispute settlement mechanism, they are all ways to safeguard the interests of domestic enterprises.cui fan said.
previous experience
liang ming added that although some cases have reached consensus in the consultations, the concessions are too big, which ultimately brings great adverse effects to the relevant countries. for example, in 1985, the united states and japan and other countries signed the plaza accord in new york, which triggered japan's bubble economy, and the bursting of the bubble economy led japan into the so-called "lost decade".
tu xinquan said,the core issue of trade remedy negotiations ultimately comes down to conflict of interests.he said: "the u.s.-eu aircraft subsidy dispute is a wto dispute settlement case, which falls under intergovernmental consultations. but this case shows that whether trade frictions can be effectively resolved through wto rules or rulings depends on the judgment of each party on its own interests. the reason why the large aircraft subsidy case has been delayed until now is that this industry is vital to both the united states and the european union, and both sides are unwilling to make concessions in this key area. even after the wto ruling, both sides still insist on their respective policies because the interests are so great that even if there is a ruling, the relevant members are unwilling to comply."
"therefore, when a dispute involves too much interest, it is difficult to reach a consensus even if consultations are held. in this case, consultations are often just a formality and it is difficult to produce substantive results. in some relatively minor trade disputes, the countries involved may be willing to compromise in consultations or even revoke relevant policies because the interests are not great." tu xinquan analyzed, "this anti-dumping and countervailing investigation on new energy vehicles involves not only the new energy vehicle industry, but also the entire eu automobile industry. the automobile industry is the largest manufacturing pillar of the eu, so the eu is unlikely to make concessions easily on this issue. the difficulty of this consultation has also increased significantly."
liang ming analyzed that from past cases, in terms of reaching an agreement through negotiations, the final closing methods are varied, all based on the characteristics of each case, and there is no unified model that can be copied. "it is normal for trade remedy investigations to be implemented in various ways. they are all normal responses based on the special circumstances of the case itself. the influencing factors include the supply and demand situation in the international market, price fluctuations, and subsequent developments and changes." he said, "from past cases, although the closing methods are not rigid, the goals are the same, which is to maximize the protection of national and industrial interests.the current china-eu trade remedy consultations and negotiations are not a simple one. the negotiation process will be arduous and long-term. china does not prejudge the outcome of the negotiations, nor will it make compromises that should not be made. china will not make concessions on major issues involving national and corporate interests.。”
“a period of high trade friction”
on the 13th, a spokesperson for the ministry of commerce stated that on august 20 and september 9, the european commission released two final rulings on the eu electric vehicle anti-subsidy case, continuing its wrong practices and imposing high tariffs. china cannot agree with or accept this, but it has always been sincere and worked hard to properly resolve frictions through dialogue and consultation.
the spokesperson revealed that since china and the eu agreed to launch the eu electric vehicle anti-subsidy case consultation on june 22, the working teams of both sides have conducted more than ten rounds of intensive consultations. china has submitted tens of thousands of pages of facts and evidence to the eu, and also proposed flexible solutions, making great efforts. however, on the one hand, the eu claimed that it was willing to resolve the issue through dialogue, but on the other hand, it quickly and hastily rejected china's suggestions and never gave any specific countermeasures, which did not reflect the sincerity of meeting each other halfway. if the consultations ultimately fail to reach a consensus, the responsibility lies entirely with the eu.
the spokesperson said that on august 24, the chinese industry proposed a price commitment solution within the time limit of the investigation procedure of this case, which fully considered the demands of the european side and demonstrated maximum flexibility. the chinese industry said that its price commitment proposal is fully compliant and enforceable, and all technical issues can be jointly resolved through consultation. it is understood that many eu member states have also shown great interest in the price commitment solution. the european commission's rejection of the relevant plan without a detailed evaluation has not only undermined the confidence of the chinese industry to continue cooperation, but also does not meet the expectations of eu member states, and is even more inconsistent with their public statement that they hope to resolve this case through dialogue.
zhou xiaoyan, vice president of the china council for the promotion of international investment, told china business news that, judging from the current international situation, geopolitical and security factors have an increasing impact on the economy, and the economic and trade field has become the "main battlefield" for some countries to suppress competitors and seek strategic advantages. the united states regards china as a strategic competitor, and cooperates with its allies to continue to "decouple and break the chain" with china, accelerate the promotion of "de-risking" and "reducing dependence" on china, and its intention to contain china's development is becoming more and more obvious. in this environment, it is much more difficult for my country to successfully resolve major trade frictions with the united states and western countries through consultations and negotiations.
she said: "at present, my country is in a period of high incidence of trade frictions. for some trade friction cases, if the two sides can reach a solution to the problem on the basis of in-depth communication and frank consultation, such as closing the case with price commitments, it is of course good. however, if the other party asks for too high a price and makes unreasonable or obviously unfair demands, then it is normal that the expected result cannot be achieved."
cui fan said that this year my country is facing many trade frictions and the situation is quite severe. in particular, in some important industries, some countries have joined forces to take measures against china. there are both economic factors and some non-economic factors. "in the face of this situation, we should remain calm and analyze the specific situation. in some cases, for example, arbitrary tariffs are imposed on chinese products without investigation and evidence, which is a clear violation of wto rules. in other cases, the trade relief mechanism allowed by the wto is abused. for different situations, our response should also be different.china is both sincere in resolving the issue through consultation and negotiation and determined to safeguard the interests of its own enterprises through various means.” he said.
cui fan told the reporter of china business news that china is the world's largest exporter of goods and the largest manufacturing country. accordingly, the frequency of trade remedy investigations we suffer is also relatively high. however, these frictions have not fundamentally hindered the development of china's foreign trade. in recent years, the proportion of my country's foreign trade in the world has generally increased. for china, it should further implement the strategy of a strong trade country, insist on winning by quality, deepen domestic reforms, optimize the competitive order, climb to the middle and high end of the global value chain, and reverse the situation of increasing volume but not increasing profits. we should rely on the large domestic market, adhere to the concept of innovative development, accelerate the construction of a new development pattern, and form new advantages in international competition.
tu xinquan believes that even though the eu may be worried or unwilling at this stage, from a long-term perspective, new energy vehicles are still an industry and market with broad prospects. chinese companies have already gained a first-mover advantage in this field, especially in electric vehicles, and the chinese domestic market is huge, so there is still a lot of room for growth. by continuously improving their technical level, cost-effectiveness and other capabilities, chinese companies can further strengthen themselves and ultimately achieve better development.
(this article comes from china business network)
