“We are extremely concerned about the possible recognition of China’s market economy status and by the scant attention paid to the question up to now on the part of Italian and European institutions - says Annarita Pilotti, Chairman of Assocalzaturifici. We have to fully comprehend the possible consequences of this measure and harm it could to the Italian and European manufacturing industry. Our sector, in total accord with Confindustria, calls on the Government to fight alongside us to ensure that our business enterprises are able to compete on a level playing field, in a global framework that is fair, competitive and transparent. China’s accession to the World Trade Organisation (WTO) in 2001 marked a major milestone for world trade. Many of us had great expectations with regard to China, imagining that the country would become increasing integrated into the global economy and that it would prove easier to access to one of the world’s fastest growing markets. But these expectations still have to be fulfilled”.
Since, up to now, China’s status as a market economy has not been recognised by the WTO, the United States, Europe and Japan have managed to protect their most vulnerable sectors in a selective manner and to combat unfair trade practices by imposing anti-dumping duties on Chinese imports. So far, these trade protection measures have proved an effective way of safeguarding industrial and manufacturing production, and consequently jobs.
“Today China claims it should automatically be granted Market Economy Status (MES) in December 2016, by playing on the ambiguity of its protocol of accession to the WTO signed in 2001 – continues Pilotti. As this deadline gets closer, there is in fact a debate underway in Brussels to decide whether or not to formally recognise China as a market economy. It is therefore essential that we make our voice heard right now, in the interest of all the many companies which, in the event of China being granted MES, would be in danger of going out of business. China has not yet adopted the required standards on its own domestic markets and persists in subsidising a number of its national industries, leading to overproduction and dumping, and giving Chinese brands an unfair advantage over their European competitors. Why should the European Union give one of its trade partners this sort of undue advantage in an unequal competitive situation? Granting China market economy status would make it much more difficult for the EU to defend its own industrial capacity, with potentially serious repercussions and a negative impact on companies and employment”.
The Washington-based Economic Policy Institute estimated recently that, as a result of China being granted this recognition, in the European Union up to 3.5 million jobs might be put at risk. In particular, more vulnerable sectors such as ceramics, steel, textiles and footwear would no longer be protected by antidumping measures in the event of unfair trade practices, thus endangering the existence of many small and medium-sized enterprises that are the backbone of Europe’s economy. In addition to this, there is the potential consumer health risk in the event of supervisory bodies being unable to guarantee that Chinese products comply with our legal requirements and European health and environmental standards.
“The Institutions cannot remain insensitive to this potential danger to Europe’s economy, particularly in view of the fact that the United States have already said they oppose granting this recognition and therefore a competitive imbalance would be created on that front as well – concludes Assocalzaturifici’s chairman, Annarita Pilotti. The European Union has already recognised that at the present moment China does not meet all the MES criteria, but the time has come to clarify intentions and strategies. The Italian Government is the only one so far to have raised the problem, with an impact study commissioned by the Vice Minister for Economic Development, Carlo Calenda. Now it is necessary for us to tackle the China question openly, pressing for major economic reforms and for the creation of a framework for international trade that is both competitive and transparent”.
Press release
Assocalzaturifici
Milan, 27 October 2015