Findings and Analysis
The aim of the section is to present the findings and discuss then with the purpose of answering the questions of the research. The purpose of this chapter is to collect the data and interpret it. The chapter describes the significance of findings in the light of existing facts and explains fresh insights about the issue of making a logical conclusion.
How far the trade dispute between Europe and China is detrimental to the Chinese economic growth
The trade disputes between China and Europe has been an important issue for both of the countries. The Europe concerns regarding the partial implementation of WTO policies towards China is still an issue. China is partly implementing the WTO policies and not hesitant in protecting its service sector and industry. China is continuing with its restrictions that limit the access of foreigners to the service market of the country and their investments. Because of such policies, the control of Chinese government - despite the steady liberalization - is relatively tight on the domestic economy (Bendini, 2014).
Antidumping dispute
Several disputes can be encountered between the European Union and China since the day the trade between these two regions started. Amongst these, the one is anti-dumping; China has been the major user of the strategy to introduce its products at lower prices to gain the larger market share. Due to the dumping practices, the country has been the target of an anti-dumping investigation that had been initiated by the European Union.
(Rudolf, 2014)
It has been determined that when China joined WTO in 2001, the antidumping initiatives of European Union increased by the European Union against China. It happened because China could not comply fully with the WTO proposed legislation and these breaches forced European to take action against China (Rudolf, 2014).
It has been determined that the shrimp consumption in the United States has been depended upon the import and China was the major exporter of shrimp to the United States. The export of shrimps accounts 43 percent of the total export of the China to the United States. However, in 2004, the situation changed in result of the imposition of taxes. The European Union applied the antidumping duty on the import of Chinese shrimp at 112.8 percent average rate. Due to this antidumping practice, China faces the loss of $945 in the long run and $1209 billion in the short run (Zhang, 2015).
However, due to the anti-dumping practices of Europe many Chinese firms had to pack their business up from the Europe Union. The one very common example of an anti-dumping dispute between the European Union and China is the anti-dumping initiative of European Union against the solar panel of China. The anti-dumping practices were introduced regarding solar panel by the European Union that could hurt the Chinese manufacturer and their exports of solar panels to European Union (Evenett, 2013). However, China introduced the anti-subsidy and antidumping investigation into the European imported wine in June 2013 that had the potential to damage the spirit sector and the European Union wine sector. This antidumping practice was initiated to resolve the case of solar panel rose by the European Union or to take the advantage in the solar panel. Although there was not any sign of the European Union breaching against the anti-subsidy or anti-dumping regulation. After the resolution of solar panel issue, China also took the case of wine back. In result of the resolution of these disputes, in 2013, taxation measures that were affecting the shipping and logistic industry and custom-based discriminatory measures were repealed by China (Stearns, 2013; Bendini, 2014).
These facts clearly communicate that for being competitive and remain stable in the market, it is essential for the European Union to maintain good relations with China. The analysis also revealed that the European Union would have to bear more losses as compared to China because of the antidumping dispute. Because, if the European Union takes any other measure in future against China, then it is visible that China will not take a side-line, but rather the country will take pivotal steps for defending its national interest.
Intellectual property rights
The enforcement of IPR (intellectual property rights), in the global arena, has become the major issue of concern. Dispute of intellectual property rights is amongst the major disputes that exist between the European Union and China. The dispute of intellectual property arose between the European Union and China when the United States launched a couple of complaint against the country (China) in 2007, regarding the inadequate enforcement of intellectual property rights in China. These disputes caused trade tension between the European Union and China.
The piracy and counterfeiting affected the proper functioning of European Union markets. Markets that have been the target of imitation issues include pharmaceuticals, toy, printing, accessories, tobacco products, and software industry. According to a survey, in 2005, the piracy of pharmaceutical products was extremely high as compared to other products and expected to reach up to 75 billion dollars in 2010 that was an increase of 92 percent as compared to 2005. The piracy rate of computer software in 2005 was 36 percent and the piracy increased dramatically in Eastern Europe and Asian parts. Due to these increased piracies, the job loss increased up to one hundred thousand jobs in Europe on an annual basis. Due to this IPR dispute, the European Union had to face the harassment in China that negatively affected the trade of European Union (Shi & Therley, 2008). It is visible from the findings that China has been the major suspect of IPR violation, and it is still (European Commission, 2015). China has been the major suspect for the European Union in term of the violation of the law of intellectual property rights as shown in the image below (European Commission, 2015):
(European Commission, 2015)
(Rudolf, 2014)
European Union is committed to a company with the law and fully implement and enforce the intellectual property rights (IPR) and promote the higher standards of protection throughout the world. The customs department of the European Union is an important player to restrict the import of such goods. European Union has legislation that protects the country from the entry of IPR infringe products in European Union market (European Commission, 2016).
It is backed by the findings of European Commission (2015) that toys, baby carriage, games, and sporting goods have been amongst the goods that had been subject to IPR breach and the above picture clearly communicates the fact. The export of baby carriages, toys, games, and sporting goods of China to the European declined at a considerable rate in the result of the IPR law of European Union (Rudolf, 2014).
It has been determined that for the attainment of the status of “market economy” and resolution of disputes, it is crucial for China to have a free market, effective standards of business accounting, and clear definition of bankruptcy laws and property rights.
Technical barriers
Europe and China are enjoying the major share of trade in today’s competitive world. The involvement of these two trade partners in the big volume of trade just not giving the benefit to the customers of both regions, but it also resulted in multiple technical frictions. Technical barriers are the rules and regulations countries impose regarding the safety and quality of the product. As the technical barriers are important for maintaining the trade flow between countries, but excessive barriers create problems. When the European Union started losing its competitive advantage in multiple industries, EU started using defending instruments. The major purpose of introducing these technical barriers was to dominate the market. Technical barriers created by the European Union have resulted in the great dispute between China and European Union. For Europe, China has been the most favourite for imposing non-technical barriers (Kikukawa, 2014). However, if the history of China is taken into consideration, then the country has been a great control over the economic activities. It is not about Europe only, but other several countries have also complaint regarding the complex business policies, the biased nature of, and the lack of transparency in, the technical standards, conformity assessment systems, regulations of China (Ichiro, 2008). When the environmental concerns increased, these technical barriers also increased that made the trade difficult in particular sectors. For example, it is cleared that the European Union is keen to promote the emission trading system of EU. The European Union introduced the ban on seal products and implemented the pan-European tax on the permits of pollution. In the 1990s, the EU banned the Chinese appliances’ import through the utilisation of CFCs (Chlorofluorocarbons). Chlorofluorocarbon is a chemicals’ family that contributes in damaging the ozone layer of the earth and let the rays of sun in that cause cancer. Such sort of barriers created serious disputes between these two regions and affected the trade of both European Union and China pessimistically. This is the fact that multiple tariffs and quotas have been reduced and eliminated to ease the trade between the European Union and China, but still multiple existing technical barriers are playing a significant role in threatening the trade. These barriers are becoming more visible over time. Technical barriers have become the predominant concern of negotiations in the global trade of these two regions. The number of notification - regarding technical barriers – targeting China, in 2010 reached at 1134 cases that was the high number in the history. However, these technical barriers hurt the sales of clothing, textile, fashion, toys, cosmetics, electrical appliances, lighting equipment, and motor vehicles. Toys have been a major target of technical barriers (Junjie, 2012).
Future forecast with regard to the trade relationships between Europe and China and their impact on the economy of each on current findings.
Currently, China is constantly enjoying its presence in the European market with its pharmaceutical companies. It has been determined that over the past few years the bilateral trade despite multiple disputes is improving between China and European Union and it is expected that the trade between the two nations will improve. In 2013, European Union exports to China were amounted up to €148269 million and pharmaceutical products made 3.8 percent of these exports. This means that the exports of European Union’s pharmaceutical sector that faced huge loss in 2005 are accounted for €5635 million in 2013 (Business Europe, 2015).
(Business Europe, 2015)
(Business Europe, 2015)
However, trade in chemical sector is also growing between the two regions and it is clearly visible that also in this sector, the Europe is taking the lead against China. The decline in exports of China to the Europe does not mean that the country is at a disadvantageous position.
(The Economist, 2014)
The decline in exports is the reason of increased outwards foreign direct investment. China has changed its policy and rather focusing on enhancing its exports, now the country is emphasising on the increase of outward foreign direct investment (The Economist, 2014). Due to the FDI policies, the decreased exports of China did not make any negative impact on the country. These facts and the overall analysis helped in concluding that despite the multiple disputes, the trade between the European Union and China will boost and both regions will continue to contribute to the success of each other. It has been determined that increased globalisation has enhanced the need for competitiveness. Several disputes have been the part of the trade of these regions, but over time, the constant improvement in the trade of these two has been examined, and the reason behind the increased trade is to help each other in improving the competitiveness. From the analysis, it can be expected that the efforts of resolving the dispute will provide the ease to the trade between these two areas and the trade between these two countries with foreign direct investment will increase in upcoming years.
List of References
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Business Europe. (2015). EU-China Relations 2015 And Beyond. Available from https://www.businesseurope.eu/sites/buseur/files/media/imported/2015-00194-E.pdf [Accessed 4 March 2016]
European Commission. (2015). Report on EU customs enforcement of intellectual property rights Results at the EU border 2014. European Commission. Available from http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_piracy/statistics/2015_ipr_statistics.pdf [Accessed 4 March 2016]
European Commission. (2016). The role of customs. European Commission. Available from http://ec.europa.eu/taxation_customs/customs/customs_controls/counterfeit_piracy/role_customs/index_en.htm [Accessed 4 March 2016]
Evenett, S. J. (2013). China-EU solar panel trade dispute: Rhetoric versus reality. Available from http://www.voxeu.org/article/China-eu-solar-panel-trade-dispute-rhetoric-versus-reality [Accessed 4 March 2016]
Ichiro, A. (2008). China and the Agreement on Technical Barriers to Trade. RIETI Discussion Paper Series 02-E-008. Available from http://www.rieti.go.jp/jp/publications/dp/02e008.pdf [Accessed 4 March 2016]
Junjie, M. A. (2012). Trade dispute between China and the EU- an overview and its implications. CIFE-IE.EI. Available from http://www.ie-ei.eu/ie-ei/ressources/file/memoires/2012/ma_junjie.pdf [Accessed 4 March 2016]
Kikukawa, J. (2014). Committee on Technical Barriers to Trade. Available from http://www.inmetro.gov.br/barreirastecnicas/PDF/atas_comercio/TBT_M_62.pdf [Accessed 4 March 2016]
Rudolf, M. (2014). Wine, solar panels and rare earths: As bilateral trade relations intensify, a formalised solution for settling trade disputes is becoming increasingly necessary. Available from http://www.merics.org/programme/internationale-beziehungen/wine-solar-panels-and-rare-earths.html [Accessed 4 March 2016]
Shi, W., & Therley, E. W. (2008). Harmony Or Coercion? China-Eu Trade Dispute Involving Intellectual Property Enforcement. Wisconsin International Law Journal. Available from http://hosted.law.wisc.edu/wordpress/wilj/files/2012/02/shi_weatherley.pdf [Accessed 4 March 2016]
Stearns, J. (2013). EU, China Agree to End Solar Panel Trade Dispute. Bloomberg. Available from http://www.renewableenergyworld.com/news/2013/12/eu-China-agree-to-end-solar-trade-dispute.html [Accessed 4 March 2016]
The Economist. (2014). Going out: More outflows than in. Available from http://www.economist.com/news/China/21631114-more-outflows-going-out [Accessed 4 March 2016]
Zhang, H. (2015). Research on aqua cultural trade and policy- three essays on China’s aquatic product trade. Auburn University. Available from https://etd.auburn.edu/bitstream/handle/10415/4755/Han%20Zhang%20-%20Dissertation.pdf?sequence=2 [Accessed 4 March 2016]
