European Law Monitor

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European Law Monitor newsEU Trade Commissioner Mandelson in China November 23-28

Trade Commissioner EU Trade Commissioner Peter Mandelson has begun a six day visit to China. In five days of meetings ahead of the EU-China Summit on November 28, Commissioner Mandelson will meet key Chinese figures and European businesses operating in China. He will urge Chinese leaders to fulfil China's WTO obligations, take concrete measures to improve access for EU exporters and investors to the Chinese market and to protect EU businesses in China from intellectual property theft. Although China has now been in the WTO for six years, EU exporters and investors continue to face persistent problems entering and operating in the Chinese market.

Speaking before his departure for China, Commissioner Mandelson said: "We need a major change in China's approach to our trading relationship in order to achieve tangible results on market access, IPR enforcement and curbing overcapacity. We do not intend to turn away from dialogue and cooperation. What we will do is treat China as a normal trading partner in the future, especially by enforcing rules where necessary."

Highlights of Commissioner Mandelson's programme

Friday 23 November: Address to the Gala Dinner of the European Chambers of Commerce in China. Saturday 24 November: Meeting Yu Zheng Sheng, Party Secretary Shanghai Municipal Committee; Visit to Siemens Shanghai; Visit to ABB Robotics. Monday 26 November: Address to International Food Safety forum; Meeting Vice Premier Wu Yi; Meeting Li Rongrong, Chairman, State Assets Regulatory and Management Commission; Address to International Intellectual Property Rights Forum; Meeting Ma Junsheng, Chairman State Postal Bureau; Address to International Intellectual Property Rights Forum. Tuesday 27 November: Meeting Tian Congming, President, Xinhua News; Meeting Zhou Bohua, Director State Administration for Industry and Commerce, Launch of IPR II programme; Opening Address EU-China Business Summit. Wednesday 28 November: EU-China Summit.

Balancing EU-China trade

EU exports to China are growing strongly • 21% in 2006 • but the EU still exports less to China than it does to Switzerland. Over the 6 days of Commissioner Mandelson's visit to China, the EU-China trade deficit will widen by more than €2.1 billion. It is likely to rise to above €170 billion in 2007. A study published by the Commission in 2007 reported that about €20billion in trade opportunities are lost every year to EU businesses because of market access barriers in China. In January, talks between the EU and China started on an upgrade of EU-China 1985 Trade and Economic Cooperation Agreement which is part of the wider European Partnership and Cooperation Agreement with China. The European Commission expects to use this agreement to take an ambitious approach to removing barriers to trade in China.

Protecting intellectual property rights

Effective protection and enforcement of intellectual property rights in China is a key issue for Europe and European businesses. China was the source of 83% of counterfeit goods intercepted at EU borders in 2006. Some European manufacturers estimated in April 2007 that Intellectual property right infringements in China cost EU manufacturers operating there one euro in every five that they earned. In 2006, seven in every ten businesses operating in China had a serious problem related to intellectual property theft. Efforts have been made by China to improve intellectual property protection and enforcement but progress is disappointing and slow.

Improving conditions for services trade and investors

Services trade is an important economic export for the EU and an area of persistent problems in China. In areas like telecoms, construction, insurance and financial services, EU companies are still blocked by discriminatory licensing systems, caps on inward investment and local ownership, enforced joint partnerships and discriminatory regulation • often in direct contravention of undertakings made when China joined the WTO. China has granted more than 20.000 value-added telecoms licenses since 2001: 10 have gone to foreign companies. European investment in China has fallen in both 2007 and 2006: a sign that many investors are concerned by the lack of regulatory transparency in China.

Facts and figures about EU-China trade
To Read the European Commission's 2006 Global Europe China strategy visit:
To read the April 2007 European Commission funded study into opportunities and market access barriers in China visit: