Europe ponders free trade or fair trade
Updated: 2012-04-12 19:42
(Agencies)
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The report entitled "Ending Unfair Globalization" by veteran industrialist Yvon Jacob and Economy Ministry official Serge Guillon rehearses familiar complaints about China's subsidized finance for companies, intellectual property theft and exchange rate management.
But it also pinpoints issues such as the failure of European authorities to police the usage of the "CE" quality label, meant to reassure consumers that goods meet EU safety norms.
In practice, importers put the CE stamp on products ranging from household appliances to toys that are rarely examined by national customs officials at the port of entry.
"It's Europe's own fault. Europe does not supervise its own market, which is the largest in the world," Jacob, a former conservative lawmaker who calls himself a "liberal internationalist", said in an interview.
"The European Union has imposed technical standards and safety norms on our own industry that don't apply elsewhere and are not checked on imported goods," he told Reuters, citing tires, lighters and chemical products as examples.
European tire manufacturers estimated that 15 percent of imported tires entering the EU market are below European safety standards, but no one inspects them, Jacob said.
When it comes to throw-away lighters, 76 percent of imports, mostly from China, do not meet the ISO 9994 safety norm that French producer Bic has to respect, he said.
The EU's so-called REACH directive has forced European businesses to find substitutes for chemicals deemed unsafe, imposing costs that competitors do not face and inciting some companies to produce offshore at lower standards.
It costs aerospace company EADS 80 million euros a year just to change the paint on the wings of its Airbus planes to conform with REACH, while rival Boeing faces no such cost, the president of EADS told Jacob.
That is peanuts compared to the EADS aircraft sales that are at risk in another dispute over Brussels efforts to make foreign airlines flying into Europe buy EU carbon emissions permits. China has suspended the purchase of $14 billion worth of Airbus jets as a result.
Jacob and Guillon want the EU to put in place quality controls backed by sanctions to enforce the EC label on imports.
They propose creating a European office for the surveillance of the internal market modeled on the EU's anti-fraud agency, and hiring more staff to follow up industry complaints of dumping at below-cost price.
Whatever the justice of their complaints, it is hard to imagine governments in gateway states such as the Netherlands, Belgium or Britain hiring armies of customs officials to filter Chinese imports more thoroughly.
The balance of power in Brussels is likely to remain with the free marketers because the EU treaty puts the Commission in the driver's seat on trade.
Even if the new public procurement powers are adopted, the EU executive's agreement would be required to trigger them.
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