THE European Union will hold public consultations in the coming months to gather the opinions of industry and trade unions on whether to relax trade barriers against China at the end of the year.

    At issue is whether it grants China “market economy status” (MES) from December, which would make it far harder for Europe to impose anti-dumping duties on Chinese goods sold at knock-down prices, changing the criteria for determining a fair price.

    China says it has a right to this status 15 years after it joined the World Trade Organization.

    The European Commission, which must come up with a proposal, has said it will talk with partners, notably the United States, who must also determine their stance, and contact “stakeholders” before returning to the issue in July.

    “Stakeholders are industry, are the trade unions and these are the people we will try to reach out to... in a more systematic way this spring with public consultations,” EU Trade Commissioner Cecilia Malmstrom told a news conference after meeting trade ministers from the EU’s 28 members in Amsterdam yesterday.

    A study for Aegis Europe, a group of some 30 European manufacturing federations, estimates the European Union could lose up to 3.5 million jobs if it loosens its trade defences. However, a study for the European Commission has put that figure at a maximum 211,000.

    Those opposed to granting MES to China had called for a public consultation, something Italian trade minister Carlo Calenda said Tuesday he also backed.

    “What we cannot do is give something without being sure that we are going to protect from unfair competition. I’m in favor of free trade, 100 percent.... but in a context of a level playing field,” he said on arrival at the meeting in Amsterdam.

    “This is something that is too serious to be managed without a true impact assessment and a public consultation,” he continued.

    Malmstrom, who discussed the issue with the European Parliament on Monday, said it was important to understand that the key question was not whether China was operating as a market economy, but whether to change the way the EU handles trade complaints against it.

    She also said that any acceptance of China’s demands would need to be accompanied by measures to retain a defence against Chinese overproduction and excessively cheap exports.

    “It is a complicated matter and further aggravated by the distortions in the Chinese economy which make the situation now particularly for the steel market extremely sensitive for many people, so this is an issue that also needs to be addressed in parallel with China,” she said.

    China’s trade surplus with the European Union in goods was 137 billion euros (US$150 billion) in 2014.

    The steel industry in European Union in particular has opposed any loosening of trade barriers against China, the EU sector lodging successive complaints over dumping, selling at below domestic market prices or below the cost of production.

    Free trade advocates say Europeans benefit from cheaper Chinese imports and that companies such as Alstom or Siemens will gain easier access to China’s vast market in return.

    The Foreign Trade Association, which represents retailers and importers, said imports of Chinese consumer goods were already so high that it did not expect a surge if trade defenses were relaxed.

    (SD-Agencies)