Step back from costly tit-for-tat trade battles
- Chinese and EU negotiators must do all they can at an early stage to avoid further aggravating already tense ties
It is regrettable that steps are being taken towards yet another international trade war, this time in tit-for-tat anti-dumping investigations by China and the European Union. Beijing has said it will look into certain pork products imported from the EU over all of last year, citing “overcapacity” and subsidies.
The accusations echo earlier allegations by Western leaders. After a seven-month probe of state subsidies for China’s electric vehicle (EV) industry, the EU has said it will raise tariffs on Chinese EVs by up to 38 per cent from July 4.
China’s investigation, announced days after the EU tariffs, will cover fresh, cold and frozen pork, offal, pig fat, intestines, bladders and stomachs. As the world’s largest pork consumer, more than half of global annual pork production ends up on tables in China.
The EU is China’s largest source of pork and pork products, making up around 54 per cent of total imports. Spain was the biggest source of affected products, with shipments worth more than US$1.5 billion. The Netherlands, Denmark and France ranked fourth, fifth and seventh, respectively.
The process could cast a shadow on trade for a considerable time. Chinese authorities said their investigation should last no more than a year, but they could extend it a further six months. A domestic pork industry association said EU dumping negatively impacted China’s pork industry, breeding industries and the interests of farmers.
The claims mirrored allegations from Western politicians that China’s new-energy industry had strangled their domestic manufacturing sectors. Executives have raised understandable concerns that Chinese industrial overcapacity could damage the nation’s relationship with Europe.
Analysts have said Beijing is not interested in escalating trade frictions with the pork investigation because of the pain it would cause to both sides. European players have voiced similar concerns about the impact of trade barriers in the EV industry. The European Chamber has encouraged both sides to depoliticise the business environment and “find ways to address the underlying causes”.
Trade negotiators must do all they can at an early stage to avoid further aggravating already tense ties.
