EU, China Resolve Telecoms Trade Dispute in “Give and Take” Spirit

Brussels and Beijing have clinched a deal that would end their long-running disagreement over telecommunications trade, according to EU Trade Commissioner Karel De Gucht, who confirmed the news to the Reuters media outlet on Tuesday.

The news comes as officials from both sides prepare to meet in Milan, Italy on 16-17 October for the Asia-Europe Meeting (ASEM), which is billed as an informal dialogue bringing together the EU’s 28 members and two other European countries with twenty Asian nations, including China.

The EU had long alleged that Chinese telecoms network producers were receiving unfair state aid, which was in turn giving them an undue competitive edge over their European counterparts; the threat of the Commission moving forward with its anti-subsidy investigation had in turn put a significant damper on ties between the two trading partners.

The resolution to the telecoms issue was reported to be a major goal of De Gucht’s before the end of his term, scheduled for 31 October. Cecilia Malmström of Sweden has been nominated to take his place from 1 November onward, and she is expected to be confirmed when the full slate of Commissioners-designate goes for a vote on 22 October, given that she was already approved by the EU Parliament’s trade committee.

Subsidies in question

After months of speculation and burgeoning trade tensions, the row formally kicked off in May of last year, when the EU trade chief announced a decision “in principle” to start both anti-dumping and anti-subsidy investigations into imported mobile telecoms networks and their essential elements – namely radio access network and mobile network core – from China.

Such probes would have been aimed at, respectively, determining whether or not Chinese telecommunications equipment had been sold on the European market at prices below their normal value – a practice known in trade jargon as dumping – and whether Chinese producers had been the recipients of unfair government support.

This past March, the Commission then announced that it was revising its decision “in principle” in order to address only anti-subsidy claims, explaining that it found the problems being faced by the European market were largely the result of unfair subsidisation and not, as initially believed, the result of dumping.