One of the most interesting and complex issues in international trade over the past decade has been how to deal with the opening Chinese market. As China has become more integrated into international markets and has joined the WTO, its trading partners have sometimes struggled with the non-market aspects of its economy. Industries hard hit by Chinese competition have argued that Chinese interference with its internal market and support for domestic companies amount to unfair trading practices, and that they should consequently be compensated or controlled. Regulators have had sympathy for these concerns, applying trade remedies like countervailing measures and anti-dumping duties to Chinese products. However, this practice has led to counter-accusations of protectionism and discrimination. The recent spate of complaints both by and against China in the WTO is evidence of this struggle.
Last week’s Xinanchem judgment, however, is a significant step along the path toward normalized trade relations between China and the EU. In this case, which Advocate General Kokott called “of fundamental importance for future trade relations between the European Union and a number of dynamic emerging countries, such as the People’s Republic of China” (AG para. 1), the Grand Chamber of the ECJ dismissed the Council’s appeal of a General Court judgment in favor of the Chinese company.
The long process of negotiating a free trade agreement (FTA) with members of the Andean Community may be winding up in the next few months. On 16 March 2012, the EU’s trade ministers authorized Trade Commissioner Karel de Gucht to sign the FTA with Colombia and Peru once it has been finalized. This means that the agreement could get the go-ahead as early as September, if the European Parliament gives its consent.
However, concerns about labor rights could stall the FTA on its way through the European Parliament. The agreement does contain commitments related to the enforcement of both labor and environmental standards. However, trade unionists and other groups are calling for a “no” on the FTA in protest against labor rights violations in Colombia.
This tension echoes the debate that has been raging in the US Congress for the past several years regarding the approval of a US FTA with Colombia. Though the US-Colombia FTA was signed in November 2006, it only received the approvial of Congress in October 2011, after the conclusion of a special Labor Action Plan to ensure protection of labor rights.
The EU-Colombia/Peru FTA is the product of negotiations that began in 2007 with the Andean Community. The broader talks were suspended in 2008 due to differences within the Andean bloc, following which the EU went on to complete negotiations only with Colombia and Peru. The FTA will remain open to signature by Ecuador and Bolivia, the two remaining members of the Andean Community.
For those who would like to read further, an extensive analysis of the agreement and its costs and benefits is available here.