On Wednesday, July 15th, the largest industrial association in Germany urged the European Union to accelerate the adoption of stronger trade defense measures in response to the unfair competition brought by Chinese companies and to maintain a fair competitive environment.
The Mechanical Engineering Industry Association of Germany (VDMA) issued a statement on Wednesday calling on Germany and the EU to respond effectively to the unfair competitive practices of China.
VDMA, the largest mechanical engineering industry association in Europe, emphasized in its latest revised “VDMA Position Paper on China” that the state subsidies and non-market policies of the Chinese Communist Party have led to unfair competition, overcapacity, dumping, and serious market distortions in Europe.
Bertram Kawlath, the chairman of VDMA, personally went to Brussels this week to convey the industry’s demands to EU officials.
“Given the clear distortion of competition caused by China and Chinese companies, the EU must take effective action to ensure a fair competitive environment,” Kawlath emphasized. “We cannot allow ourselves to become pawns in the game of subsidies, dumping, and currency manipulation.”
The European Commission is currently taking a “step-by-step approach to investigate individual products.” Oliver Richtberg, VDMA’s director of foreign trade, explained that this method is too slow, and following the current procedure, completing all product investigations could take decades.
VDMA proposed that in the case of construction machinery, for example, if there is evidence of unfair competition, anti-subsidy duties should be levied at the product group level.
Furthermore, VDMA also proposed that the market-distorting behavior of Chinese companies has been widely documented, in which case it should be up to Chinese companies to prove that they have not benefited from unfair advantages, rather than European companies having to prove they have been harmed.
However, VDMA opposes the implementation of import quotas (imposing high additional tariffs on imported goods exceeding the quota) as such measures could affect trade dynamics and prices, affecting other countries.
According to Reuters, the EU’s trade deficit with China has reached approximately 1 billion euros (around 1.5 billion US dollars) per day, and this growing deficit has raised great concerns among EU countries. EU leaders also discussed last month whether stronger trade measures against China are needed.