Pascal Lamy, the former Director-General of the World Trade Organization, has told CGTN “there is no such thing as a trade war between the European Union and China’.
The EU is split on tariffs for Chinese electric vehicles and China has responded with tough new restrictions on the import of brandy from Europe.
#EUTrade #EUChina #China #EVs #WTO
The EU is split on tariffs for Chinese electric vehicles and China has responded with tough new restrictions on the import of brandy from Europe.
#EUTrade #EUChina #China #EVs #WTO
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NewsTranscript
00:00I believe that it's always good to talk, to explain, and I'm happy they did it with this
00:10relatively calm tone, which contrasts with what we see in the media, who jump immediately
00:20in a trade war between EU and China.
00:27There is no such thing as a trade war between EU and China.
00:32There are trade frictions that have to be handled according to the WTO rules that govern
00:43trade frictions.
00:45The EU, on its side, believes that EU Chinese cars exported in Europe are sold at prices
00:58which are dumped by the impact of Chinese subsidization for car producers in China.
01:09And according to WTO rules, the EU has calculated a tariff that rebalances this impact of subsidies
01:21on the low price of Chinese EVs in Europe.
01:26If China is not pleased with that, and this is perfectly understandable, China will go
01:33to the WTO and initiate a dispute against the EU, probably arguing that the tariff of
01:44the EU is not in line with WTO rules.
01:47This will be litigated.
01:50On the other side, China believes that European cognac, in the occurrence French cognac,
01:59there is no production of cognac in the European Union anywhere in France, is sold at prices
02:08which are subsidized.
02:10Of course, of course, there is a strange coincidence between this Chinese new measure, which, if
02:21the EU believes it is unfounded, which it may be, then it will go to the WTO dispute
02:28settlement and try to argue that China does not have the necessary evidence that French
02:36cognac is subsidized and competes unfairly with Chinese domestic products.
02:44Sorry for being a bit long, but this is the reality.
02:48It's not a trade war.
02:50There are trade frictions.
02:52There have always been trade frictions.
02:54There will always be trade frictions.
02:56We have WTO and a dispute settlement system that works, not between the US, but between
03:03the EU and China.
03:05It's very good to explain that, because as you said, there are always these trade frictions.
03:11So how do these big leaders, how do they get over those frictions then?
03:16Is it this face-to-face talking?
03:22If in these two cases, if EU is unhappy and if China is unhappy, the solution is very
03:30simple.
03:31You go to the WTO judge who will adjudicate this case.
03:37That's the short-term answer.
03:38OK.
03:39If you look at the big picture, and we have to look at the big picture, and of course
03:45the picture is bigger for cars and EVs than it is for cognac or whatever strong alcohol,
03:54which is not a big economic thing.
03:57It matters, but it's not as big as cars.
04:00I think the car issue is a holistic issue that needs to be seen by both sides.
04:11The big question for China is, do we export to the EU or do we invest into the EU?
04:20And the big question for EU is, do we believe that an integration of value chains between
04:29China and Europe in electric vehicles is the way to go, or do we behave like the US,
04:37who believe that car production has to be decoupled between the US and China?
04:45And this is the big picture.
04:48And I hope, I hope that at the level of the highest authorities on both sides, they don't
04:54spend their time looking at the small picture.
04:58They have to look at the big picture.
05:00That's the big picture.
05:01The big picture is, there is a big future for electric vehicles, production, trade.
05:09It's good to fight against carbon emissions.
05:13How do EU and China together look at this big picture?
05:19How much of integration or how much of arm-length separation needs to take place in the future?