In Brief

16 May 2013

China Pushes Back on EU Proposed Solar Panel Duties

Beijing has publicly spoken out against the European Commission's high-profile decision to apply provisional anti-dumping duties on imports of Chinese solar panels. (See Bridges Weekly, 8 May 2013).

"We hope the EU will be cautious about imposing restriction," Chinese Ministry of Commerce spokesman Yao Jian said following news of last week's Commission decision, adding that the Asian economy wishes to avoid a "trade war." However, while advocating for negotiations between the two trading partners to resolve the disagreement, Yao also said that Beijing "will not let Chinese companies be hurt."

EU member state Germany also prefers an "amicable solution" to the solar row, government spokesman Steffen Seibert said on Monday. China is the EU's second-largest trading partner, and is seen by many as essential for helping the 27-country bloc to pull out of its recession. The Commission is said to be aiming for a negotiated solution before the December deadline for finalising the duties.

ICTSD reporting; "Germany disputes hard EU stance on China solar panel duties," REUTERS, 13 May 2013; "China to resist EU over solar panel import tariffs," MARKETWATCH, 9 May 2013.

Oilsands Row Sparks Renewed EU-Canada Tension

A European Commission proposal to label oil from Canadian oilsands as "highly polluting" has again fuelled tension between Brussels and Ottawa, with Canadian Natural Resources Minister Joe Oliver pledging last week that his country "will defend our interests vigorously" - including possibly tabling a WTO complaint on the matter. The comments come as both parties work to finalise talks for a bilateral trade deal.

Ottawa has previously accused the EU proposal of being in violation of international trade rules and discriminating against Canadian exports. In response, EU Ambassador to Canada Matthias Brinkmann has said that the EU's policies on the subject will be "non-discriminatory and science based and will stand the test at the WTO."

However, Oliver expressed confidence that the dispute would not derail the trade pact negotiations between Ottawa and Brussels, saying "these issues are entirely separate."

ICTSD reporting; "Canada says it may take EU to WTO over oil sands dispute," REUTERS 8 May 2013; "Joe Oliver not backing down in Canada-EU battle over oilsands," CBCNEWS, 11 May 2013.

China, Switzerland Finalise Terms for Bilateral Trade Deal

China and Switzerland have finalised the technical terms for a bilateral trade pact, officials said this weekend, after over three years of negotiations. According to a Swiss economic ministry spokesperson cited by the Wall Street Journal, Bern and Beijing officials are expected to sign the agreement - details of which will be published during the summer - in the coming weeks.

According to Swiss media outlets, officials in Bern are waiting for Chinese Premier Li Keqiang's visit to Switzerland on 24 May to make the news public. No implementation date has been set for the accord, which reportedly covers pharmaceuticals, chemicals, machinery, and watches, among other products.

This is the second trade deal between China and a European country, following last month's clinching of a pact between the Asian superpower and Iceland (See Bridges Weekly, 18 April 2013). While Iceland's exports to China last year were US$61 million, Swiss exports in 2011 were US$14.7 billion.

ICTSD reporting; "Watchmakers Eye Timely Boost in Trade Deal," WALL STREET JOURNAL, 14 May 2013; "L'accord de libre-échange avec Pékin favorable à l'économie Suisse," RTS, 15 May 2013; "Accord trouvé entre la Suisse et la Chine," L'AGEFI, 15 May 2013.

EU: Bangladesh Factory Collapse Could Affect Trade Scheme Eligibility

Last month's factory collapse in Bangladesh - which led to over 1000 deaths - could soon lead to trade implications for the developing country, as questions continue to be raised over the quality of worker conditions. The factory at issue produced garments for major European and American companies, including Swedish retail giant H&M, US retailer Gap Inc., Spanish retailer Mango, and British company Primark, among others.

According to a statement released earlier this month by EU High Representative for Foreign Affairs and Security Policy Catherine Ashton and Trade Commissioner Karel de Gucht, the EU is considering "appropriate action" as a response, including potentially re-evaluating Bangladesh's eligibility for the EU Generalised System of Preferences (GSP). Such action would be aimed at incentivising "responsible management of supply chains involving developing countries." Under the GSP's "Everything But Arms" scheme, Bangladesh currently enjoys duty-free and quota-free access to the EU market.

The US had also been reconsidering its GSP programme with Bangladesh since January due to concerns of worker rights issues, even before the factory collapse made international headlines. The US Trade Representative (USTR) is scheduled to decide next month whether to modify Bangladesh's status. How much the factory collapse will impact the decision has not been made clear.

Meanwhile, Bangladesh's government has already responded to such international pressures for industry reform, raising the minimum wage for garment workers and allowing trade union formation without prior permission from factory owners. Several major European retailers that used the Bangladeshi factory have also signed an agreement on Bangladesh building and fire safety. However, the accord has reportedly struggled to find similar support among American companies.

ICTSD reporting; "European, U.S. retailers split on Bangladesh reform plan," REUTERS, 14 May 2013; "Bangladesh eases trade union laws after factory building collapse," THE GUARDIAN, 13 May 2013, "Bangladesh Trade Was Under U.S. Review Prior to Factory Collapse," BLOOMBERG BUSINESSWEEK, 3 May 2013.

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