China’s Tire Exports to EU Still Face Barriers

The plenary session of European Parliament passed a non-legislative resolution on May 12 not to admit China’s market economy status.

China’s export to EU treated as “non-standard”

The resolution implies that some of companies and labor unions in EU worry that more Chinese products will enter the EU market, thus threaten in the region and affect the employment if they admit China’s market economy status.

The resolution emphasizes that before China meets the five standards of EU on market economy status, China’s export to EU will continue being treated as “non-standard”.

It means that in the process of anti-dumping and anti-subsidy investigation against products imported from China, the Europe will continue assessing whether the costs and prices of Chinese products are market prices.

According to the provisions for China’s joining in the WTO, in the anti-dumping and anti-subsidy investigation, the degree of dumping may not depend on the actual costs in China, but on the prices of similar products in a third market economy country or importing country, namely a “surrogate country”.

The provision will be valid for 15 years and expire on December 11, 2016.

China’s tire exports to EU still restricted

So far, China is the second largest trade partner of EU and the daily transaction between China and the Europe is over one billion euros. In addition, the Chinese market is a significant source of profits for numerous companies and brands from EU.

Tire is one of the key goods exported from China to EU.

According to figures released by ETRMA, China was the primary tire supplier to EU in 2015, when the volume of China’s tire exports to EU grew 12%.

The passenger car tires imported by EU increased 6% in 2015, when those imported from China rose 9%.

China’s total tire exports in 2015 lessened 4%, but its exports to EU continued growing.

Under such circumstance, EU may impose anti-dumping and anti-subsidy tariff on tires imported from China at any time.

The European Parliament has already asked European Commission to negotiate with other primary trading partners and issue a unified plan on how to interprete WTO’s rules on China’s market economy status.