EU-China: Protectionist measures and tit-for-tat retaliation counterproductive, says ICC

The tensions follow announcements by the EU to impose antidumping duties on imports of Chinese solar panels and the launch of a Chinese anti-subsidy investigation on wines imported from the EU.

Expressing concern, the ICC response states that heightened tensions are largely a consequence of straying away from the path of multilateralism. It warns that protectionist actions are detrimental to the global business environment and prospects for stronger economic recovery at a time when greater flows of international trade and investment could provide a debt-free and much-needed boost to world economic growth and job creation. 

“World Trade Organization (WTO) members should be rallying behind the objective of reaching agreements at the forthcoming WTO Ministerial Conference to be held this December in Bali,” the ICC statement said. “ICC urges the EU and China, as well as all other WTO members – and in particular G20 countries – to reject protectionism and focus their attention on achieving tangible results at the WTO Bali Ministerial. Such results should include an agreement on trade facilitation, measures to liberalize multilateral trade in a number of areas for the benefit of all WTO members, and more effective WTO rules. These are paramount in restoring global business confidence in a fragile economic environment.”

The ICC response states that the EU-China dispute and the recourse to protectionist measures are partly a product of the failure to reach agreement through negotiations at the WTO.

Speaking recently at the Business-20 Summit in Saint Petersburg, Russia, ICC Chairman Harold McGraw reminded G20 policymakers that despite recurring pledges to roll back protectionist measures, the G20 is failing to demonstrate global leadership on trade openness. Only one G20 country, Canada, ranks among the world’s top 20 economies most open to trade and investment, according to ICC’s Open Markets Index 2013, released last month.

Citing figures from a recent ICC-commissioned report Payoff from the World Trade Agenda, to illustrate the potential gains from facilitating trade, Mr McGraw said: “A reduction of trade barriers by 50% among G20 countries would result in more jobs, higher real wages and an increase in exports by as much as 20%. If the G20 would demonstrate leadership on ICC recommendations to conclude a WTO trade facilitation agreement, then we could see world GDP increases of another $960 billion annually – along with more than $1 trillion in world export gains and 21 million new jobs.”

Download the ICC statement on trade tensions between China and the EU

Download the 2013 ICC Open Markets Index

Download Payoff from the World Trade Agenda