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Telecoms probe hurts Chinese, EU interests
Protectionism no painkiller for Europe
The European Commission, the European Union's executive arm, warned China yesterday it is ready to launch an investigation into anti-competitive behavior by makers of mobile telecommunications equipment, opening a new front in a trade offensive against a key partner.
EU Trade Commissioner Karel De Gucht said in a statement that he and fellow commissioners had agreed in principle to open an anti-dumping and anti-subsidy case, but would first seek to negotiate a solution with Chinese authorities.
"The clock is ticking. We have had an open-door policy for negotiations with our Chinese partners for approximately one year now, and we hope that the Chinese authorities step forward and engage with us in a serious manner," De Gucht's spokesman said.
The case is obviously aimed at Huawei and ZTE, China's two leading telecom system and equipment providers.
The EU is China's most important trading partner, while for the EU, China is second only to the United States. Chinese exports of goods to the 27-member bloc totaled 290 billion euros (US$376 billion) last year, with 144 billion euros going the other way.
The EU trade deficit in goods with China has dipped since a 2008 peak, but the EU has increased the number and scale of trade-related investigations into alleged anti-competitive behavior by China and Chinese competitors.
The EU has 31 ongoing trade investigations, 18 of them involving China. The largest to date is that into 21 billion euros of imports from China of solar panels, cells and wafers, for which it is set to impose punitive duties.
The proposed telecoms investigation would mark a new twist in the EU's trade defense against China because it would be launched by the commission itself and not in response to a complaint by industry.
Officials have indicated that, while European manufacturers such as Ericsson, Nokia Siemens Networks and Alcatel-Lucent have suffered as a result of cheap imports, they are not prepared to make a formal complaint for fear of reprisals.
The EU said that by launching a case on its own initiative - known as an ex-officio case - it would provide a degree of protection for EU companies.
China exports network equipment, base stations and connections used by telecoms providers to transmit voice and data messages worth more than 1 billion euros a year to the EU, giving them almost a quarter of the market.
