Baroness Ashton in China for trade talks.

Commissioner Ashton

Baroness Ashton, the EU trade Commissioner, is currently in China for discussions on trade and investment issues. Speaking ahead of her visit, she said " The EU and China share common goals in trade and investment. We must continue to build confidence in order to realise our full potential and deal effectively with any issues that arise, especially in the face of the economic downturn".

Figures recently released by the Chinese Ministry of Commerce showed that due to dwindling demand amid the economic crisis, trade and investment between China and the EU slumped in the first half of this year, with trade volume falling 20.9 percent year on year and the value of the EU's investment in China declining 2 percent.

The Chinese government is most concerned about the EU's anti-dumping measures, with the EU frequently taking action against China. "We saw reemergence of anti-dumping cases against China recently. An increasing number of Chinese enterprises received unfair treatment. We are very concerned about this," China's Ambassador to the EU, Song Zhe, told the International Trade Committee of the European Parliament, "But we believe between China and Europe, there is more cooperation than competition, more opportunities than challenges. At present, it is urgent to strengthen economic and trade cooperation by maintaining mutual flow of trade and investment and creating more business opportunities," he added.

Across the Atlantic, a proposal by a US trade union to impose tariffs on Chinese-made tyres has placed President Barack Obama in very difficult position. Whilst trade with China is vital to the US economy, the President is somewhat beholden to the Unions, which collectively donated some $400 million to his election campaign.

The high-level tariffs would effectively impose a ban, thus keeping Chinese tyres off US roads. Obama has to balance Sino-US trade relations with the demands of his financial backers. A decision is expected before Sept 17th.

Growth in investment between the EU and China has grown at an astonishing rate, and Baroness Ashton will surely need to show some courage in adressing the anti dumping issue. If the US cannot resolve its issues with China, then by taking a lead the EU can try to ensure pole position in trade relations with the emerging economic superpower. Extraordinary times call for extraordinary actions. Can the Commission change its habits, and get out of the starting blocks first for a change?

(nb. Dumping is distinguished from normal practices of low-price sales resulting from lower costs or greater productivity. The key criterion in this respect is not, in fact, the relationship between the price of the exported product and that on the market of the country of import, but the relationship between the price of the exported product and its normal value. Thus, a product is considered to be dumped if its export price to the Community is less than the comparable price for a like product established in the ordinary course of trade within the exporting country.)