Europe Presses China to Alter Trade Practices

(New York Times – Reuters)

The European Union pressed China on Wednesday to amend its trade practices to stop technology theft, counterfeiting and discrimination against foreign companies, after it failed to make Beijing budge on its exchange rate.

Opening a day-long meeting with Premier Wen Jiabao of China, the president of the European Commission, José Manuel Barroso, said the commercial relationship between China and the European Union, worth 327 billion euros ($453 billion) in 2009, was vital for the global economy.

Chancellor Angela Merkel of Germany, the leader of Europe’s biggest exporting country, met Mr. Wen on Tuesday evening and pledged to work for China to be granted the European Union’s coveted “market economy” trade status by 2016. That would give Beijing better protection against European antidumping penalties – a major irritant for the Chinese. Read more here.

EU Delays Green Barrier to Canada Oil Sands: Draft

(Reuters – Pete Harrison)

Europe has yielded to Canadian pressure by delaying possible green trade barriers to Canada’s highly polluting oil sands, but only for one year, a leaked document shows.

Canada has repeatedly warned that draft EU standards to promote greener fuels will harm the market for its oil sands – tar-like oil that is trapped in sediment and forms the world’s second-largest proven crude reserves after Saudi Arabia.

A recent draft of the European Union’s “fuel quality directive” calculates greenhouse gas emissions from myriad transport fuels, from hydrogen to diesel, but says oil sands will only be evaluated some time before December 31, 2011 – a year later than plans made as recently as June. All other fuels will be dealt with by the end of this year, with the aim of guiding industry on which fuels are best suited to the EU’s goal of cutting carbon emissions to one fifth below 1990 levels over the next decade.

The European Union and Canada are in the middle of free trade talks, and the issue of tar sands has become hot. Read more here.

EU to Ratify First Free Trade Deal with Asian Partner

(New York Times – Stephen Castle)

The European Union agreed Thursday to sign a sweeping new free trade agreement with South Korea – its first with an Asian trade partner – after Italy removed objections that had threatened to block the deal.

Politicians and officials welcomed the announcement as an important signal for free trade and proof that protectionist pressures are being resisted, despite the uncertainty in the global economy.

“This the first generation of bilateral trade agreements which will bind Europe and Asia together in an ever-closer economic bond,” said Steven Vanackere, vice prime minister and foreign minister of Belgium, which holds the EU’s rotating presidency. “This is a very big step in opening markets in Asia for our companies.” Read more here.

EU Suspends WTO Sanction Bid Against U.S. in Dumping Dispute

(Industry Week – Agence France-Presse)

U.S. provides reassurances it will bring measures into compliance with global trade rules

The European Union said Wednesday it had suspended a request at the World Trade Organization for the right to impose sanctions on Washington over a controversial U.S. anti-dumping calculation.

"Yesterday the European Union and the United States asked the arbitration panel deciding on the level of sanctions that the EU is entitled to impose on the United States in the zeroing dispute to suspend its work," said John Clancy, spokesman of the European bloc. Read more here.

EU Parliamentarians Criticize Anti-Counterfeiting Deal

(Networkworld.com)

The proposed multilateral Anti-Counterfeiting Trade Agreement (ACTA) has hit a stumbling block over the liability of ISPs in allowing customers access to peer-to-peer file-sharing sites and the inclusion of geographic indicators.

European Commissioner for Trade, Karel De Gucht, gave a statement to the European Parliament on Tuesday and attempted to downplay fears that the agreement could infringe individual civil liberties and result in increased border searches for counterfeit and pirated goods. Personal laptops and MP3 players will not be searched, the commissioner said, adding that only piracy and counterfeiting on a commercial scale are of interest.

However, he said that he would walk away from any deal if it did not include so-called geographic indicators, which aim to protect E.U. products such as champagne or Parma ham. De Gucht described the latest round of negotiations in Washington, D.C., last month as “disappointing”. Read more here.

CFIA: Industry Notice

(CFIA)

Please be advised that the following has been added on the CFIA web site: Industry Notice: European Union Audit of Canada’s Fish Inspection Program.

U.S.-EU Food Fight Dogs Anti-Counterfeiting Talks

(Reuters – Doug Palmer)

A long-running battle over the right to use European place names, like Parma or Roquefort, for some of the world’s most popular foods and beverages looks to be the toughest remaining issue in international trade talks aimed at reducing copyright and trademark theft.

The 27-nations of the European Union want the proposed Anti-Counterfeiting Trade Agreement (ACTA) to cover “geographical indicators”, which are names for food and alcoholic products drawn from a particular location, such Champagne or Cognac, both in France.

But U.S. business groups worry that the EU demand would mean American products as commonplace as Kraft parmesan cheese could potentially be treated as illegal items under the pact and subject to seizure by customs officials. Read more here.

WTO Says No to Hi-tech Duties in EU

(Industry Week – Agence France-Presse)

The World Trade Organization has backed the United States, Japan and Taiwan in their complaint against EU duties on high-technology products, according to a ruling published on August 16.

"Having found that the European Communities has acted inconsistently ... we recommend that the Dispute Settlement Body request the European Communities to bring the relevant measures into conformity with its obligations," the WTO panel of arbitrators said.

The plaintiffs had accused the EU of violating the WTO's Information Technology Agreement by imposing duties on imports of products including television set-top boxes, flat-screen panels and printers with multiple functions. Read more here.

WTO Said to Rule Against EU's Policy on Anti-Dumping

(Bloomberg – Jennifer M. Freedman)

The European Union’s method of applying extra duties on imports it considers to be unfairly priced breaks global trade law, the World Trade Organization said, according to a person familiar with the ruling.

WTO judges in Geneva concluded the EU’s policy of imposing a single blanket duty on imports discriminates against Chinese exporters, said the person, who declined to be identified because the ruling is still confidential.

The decision comes a year after China lodged a complaint against the EU over the 27-nation bloc’s plan to impose five- year levies on imports of Chinese iron or steel fasteners, valued at about 575 million euros ($743 million) in 2007. The EU said at the time that the tariffs would “prevent further distortions and restore fair competition.”

The ruling may have broader implications by compelling the EU to begin imposing anti-dumping tariffs on a company-by-company basis. Read more here.

Canada Sees Steep Trade Rise After EU Trade Deal

(Reuters)

Canada expects trade with European Union to rise by some 20 percent in the five years after a trade deal between Canada and the EU is enforced, Canada’s trade minister said on Monday.

Canada is negotiating the free trade deal with the EU, which should ease trade and create new business opportunities. The deal is expected to be finalised in 2011, Peter Van Loan said during a visit to Slovenia as part of a European tour.

He told Reuters trade growth should be particularly high with new EU members, where there has so far been little bilateral business.

“I want to highlight ... that there is indeed a part of Europe where there has been high economic growth over the past 10 to 15 years and ... that there are opportunities here,” Van Loan said.

“A study projected a 20 percent increase in trade ... simply as a consequence of the agreement.” Read more here.

Confectioners Give Cautious Backing to EU Labelling Vote

(FoodNavigator.com – Jane Byrne)

Representatives of Europe wide confectionery, biscuit and chocolate makers have given a cautious backing to the much-anticipated EU parliament vote on amendments to the proposed food information regulation, which has come out in favour of industry supported GDAs.

David Zimmer, secretary general of Caobisco, in a statement issued to ConfectioneryNews.com, said that while the body is closely reviewing the details of the vote and its implications for its members he said that it is encouraging that the EP has recognised the limitations of the traffic lights approach to labelling.

Ever since the proposal for the new regulation was published in January 2008 there has been hot debate in Brussels and across member states about the best mandatory system for displaying nutritional information.

Although a host of formats already exist across the bloc, two have dominated discussions: the food industry-developed Guidance Daily Amount (GDA) scheme, and the colour-coded traffic-light scheme. Read more here.

Related: What ‘Natural’ Means in Food Regulations

Green Rule Draws Flak

(Financial Post)

As investment in Ontario’s alternative-energy sector continues apace, legal experts are warning the provincial government may be violating international trade agreements with its local-content requirements. At the same time, energy producers are finding it difficult to meet the “made-in-Ontario” rules, which require a certain percentage of a project’s cost be sourced within the province.

“The EU is really fuming about this,” said Milos Barutciski, an international trade partner with Bennett Jones LLP, in Toronto.

“While on the one hand they’re negotiating with Canada about access to government procurement, the main province that they’re interested in getting access to comes up with this fairly straightforward discriminatory restriction on government procurement.”

Officials from the European Union have recently joined a call from the government of Japan asking Ontario to drop the domestic-content requirements of its legislation, saying it views Ontario’s rules as protectionist and a violation of international trade agreements. Read more here.

EU Commissioner Wants U.S. Action on Trade

(The Wall Street Journal)

Karel De Gucht, the European Union’s trade commissioner, challenged the U.S. Wednesday to break an impasse in the current round of global trade talks.

“Americans need to say what they want,” said Mr. De Gucht, who visited Washington last month.

The nine-year-old round of tariff and subsidy-cutting talks—the so-called Doha Round—is stalled mostly because the Obama administration is handcuffed by a strong protectionist movement in the U.S., an assessment shared by international trade officials and U.S. trade representative Ron Kirk. “It’s a deal the Bush administration refused. How can you expect a Democratic administration without [special authority from Congress] to do this deal?” Mr. De Gucht said in an interview with the Wall Street Journal.

Doha “needs a top-up” and it is up the U.S. to come up with new ideas, he said. Mr. De Gucht suggested a tariff exemption on environmental goods, hardly a controversial notion, and language that would make it easier for service companies such as law firms and consultancies to do work in foreign countries. Read more here.

EU Fears Trade Barriers Enacted During Crisis May Be Permanent

(Matthew Dalton — Dow Jones Deutschland)

Most of the trade barriers erected by the European Union's trading partners during the economic crisis are still in place, posing a long-term risk to the global trading system, the European Commission said in a report released Friday.

Despite widespread fears that governments would broadly resort to such measures due to the global economic downturn, protectionism has been relatively restrained. But the barriers that have been put in place are becoming “permanent features” of the global economic landscape, the commission said.

“There is a risk that trade-restrictive measures introduced by our partners during the crisis will become part of the trade regime even when the economy picks up speed,” said EU trade commissioner Karel De Gucht. “What we need now is an exit strategy from protectionism.” Read more here.

Japan Questions Local-Content Requirements in [Ontario’s] Energy Programme

(WTO News)

Japan, at the meeting of the Council for Trade in Goods on 21 May 2010, expressed concern over what it said were local-content requirements in a renewable-energy programme in Canada’s province of Ontario. It asked Canada to explain the consistency of the requirements with various WTO agreements, including the GATT 1994 provision on equal treatment for imports, and the Agreement on Trade-Related Investment Measures. The European Union and the United States expressed interest on this matter.

Canada said that its trade officials are reviewing the programme, and that Japan's questions had been forwarded to Ontario.

On another matter, Chinese Taipei expressed concern that Canada imposes higher tariffs on products from Chinese Taipei as compared to products from developing economies with higher levels of per capita GDP. It urged Canada to provide non-discriminatory tariff treatment to products from Chinese Taipei as Canada had done with other members that are at comparable levels of development.

Canada said that it already maintains very low tariffs, and that recently, it had eliminated tariffs on manufacturing inputs and machinery. It added that these measures have benefited its trading partners, including Chinese Taipei.

The Goods Council approved requests by the European Union to extend deadlines on its tariff negotiations with other members on its enlargements in 2004 and in 2007 respectively. It also approved a request by Argentina to extend its waiver related to the introduction of the Harmonized System 1996 changes, and forwarded the decision to the General Council for adoption.

EU Official Prods China to Act More Global

(Bloomberg/Business Week)

EU trade commissioner Karel De Gucht has called on China to respect its global responsibilities, saying “splendid isolation is no longer an option.”

Speaking at a conference in the European Economic and Social Committee in Brussels on Thursday (6 May), Mr De Gucht said China must match its newfound economic weight with greater participation in international governance forums such as the World Trade Organisation.

“With size comes responsibility,” said the Belgian politician who has recently returned from a visit to China where he met the country’s commerce minister, Chen Deming.

European businesses have increasingly expressed their frustration at a perceived slowdown in market-opening reforms in the Asian powerhouse economy, saying Beijing is succumbing to the protectionist calls of domestic producers. Read more here.

Related: European Union Launches First-Ever Anti-Subsidy Action Against China (International Law Office — Subscription required)

Ottawa Will Defend Dairy, Poultry in EU talks: Blackburn

(CTV.ca – The Canadian Press)

Canada’s minister of state for agriculture says Ottawa will defend the supply management system of dairy and poultry products in any free trade talks with the European Union.

Jean-Pierre Blackburn won’t be taking part in the next round of talks between Canada and its second largest trading partner – he’ll be in the Netherlands commemorating Canada’s contribution to that country’s liberation in the Second World War. Prime Minister Stephen Harper and Minister of International Trade Peter Van Loan will be among the federal politicians in Brussels for the Canada-EU summit on May 5. But Blackburn weighed-in on the talks and said the federal government remains committed to backing its dairy and poultry industries.

“There is a need for new markets for the food sector like any other sector,” he told The Canadian Press. “But at the same time we know some specific aspects have to be protected.” He said supply management allowed dairy and poultry industries to remain among the most profitable and stable in Canada. Read more here.

Carbon Tariffs on Imports Risk Trade War: EU Study

(MoneyControl.com)

The European Union (EU) is considering border tariffs on imports from more polluting countries, but an initial assessment shows such levies could spark trade wars, draft reports show. Two European Commission reports do not explicitly reject a push for border tariffs by France and Italy, but say they would be fiendishly complex to calculate, create a huge administrative burden and risk trade conflict.

“Border measures risk clashing with the obligations under the World Trade Organisation (WTO),” said one study looking at the cost of increasing EU curbs on climate-warming emissions.

France and Italy are worried that their industries, which pay for EU permits to emit carbon dioxide, will lose out to cheaper imports from countries that impose no such charges. Read more here.

Debt Crisis Spreads Through Europe

(The Globe and Mail – Eric Reguly)

Investors are treating Portugal as the next Greece as the sovereign debt crisis spreads through the Mediterranean. Portuguese bonds slumped again Tuesday as bond holders took the view that the country’s credit quality is deteriorating, even though its deficit and debt ratios are not as dire as Greece’s. “Investors are looking for the next weak link in the euro zone,” Simon Ballard, credit analyst in London with RBC Dominion Securities, said in a phone interview. “That may be Portugal, though it’s a bad day for everyone in Club Med.”

Credit default swaps on Portuguese debt soared to as high as 380 basis points, up about 40 points from Monday, in early afternoon trading in Europe. That means it costs $380,000 (U.S.) to insure every $10-million of Portugal’s debt against default. Credit default swaps in other Mediterranean countries also rose. Italy, which has one of the world’s highest debt-to-GDP ratios, saw its credit default swaps widen by about 10 basis points, to 160 points.

“The contagion is definitely spreading and spreading quite rapidly to Portugal, Spain, Ireland and Italy,” Mehernosh Engineer, a credit strategist at BNP Paribas, said in a report published Tuesday. “The market has been in a show-me-the-money mode for well over three months and the lack of guidance is slowly and steadily sowing the seeds of a double-dip.” Most European stock indexes were down by 1 per cent or more on fears the debt crisis is spreading. The euro lost 0.68 per cent against the U.S. dollar. Read more here.

EU Expects Yuan to Gradually Appreciate

(Wall Street Journal – Andrew Batson)

European Union Trade Commissioner Karel De Gucht said he expects China to make gradual adjustments to its exchange rate over time, but doesn’t think that trade actions or other outside pressure will speed up the process. Mr. De Gucht met with Chinese Commerce Minister Chen Deming in Beijing Tuesday, and said he had argued that a change in China’s currency regime would be beneficial to both Europe and China. But Mr. De Gucht, who was meeting his Chinese counterpart for the first time since being named Europe’s trade envoy in February, didn’t hold out hopes for a quick resolution of an increasingly sensitive issue.

“I think we will have to wait some time. What I would expect is that you would see a gradual adjustment of the yuan,” he said. “I really think they are only going to do it provided it is beneficial to their own economy. I think they will have to come to the conclusion that it is – if not, all the problems we witnessed before the crisis will come back.”Read more here.