Last month’s State of the Union address committed to defending fair trade on the global stage. Now, European Commission President, Ursula von der Leyen, must show that fair trade means fair trade for all and applies to all sectors equally.

Antonello Ciotti is the president of PET Europe.

In her State of the Union address on 13 September 2023, President of the European Commission Ursula von der Leyen outlined the main priorities and “flagship initiatives” for the year to come.

A month later, and after the political dust has settled, one issue stands out – fair trade. The message could not have been clearer, Europe will robustly defend fair trade on the global stage.

“… competition is only true as long as it is fair. Too often, our companies are excluded from foreign markets or are victims of predatory practices. They are often undercut by competitors benefitting from huge state subsidies. We have not forgotten how China’s unfair trade practices affected our solar industry. Many young businesses were pushed out by heavily subsidised Chinese competitors. Pioneering companies had to file for bankruptcy. Promising talents went searching for fortune abroad. This is why fairness in the global economy is so important – because it affects lives and livelihoods. Entire industries and communities depend on it. So, we have be to be clear-eyed about the risks we face. Take the electric vehicles sector. It is a crucial industry for the clean economy, with a huge potential for Europe. But global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies. This is distorting our market. And as we do not accept this from the inside, we do not accept this from the outside. So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China.”

Never before has a trade defence investigation been given this prominence in a speech delivered on the floor of the European Parliament. Highlighting a future trade defence investigation against a single country in such a political forum is surprising, but not shocking. Of the 60+ trade defence investigations currently on-going, more than half (59%) involve China. Five times more than the next investigated country.

While this may be news to many EU political observers, sadly it is not to the European PET industry. As a proud European manufacturing industry, we make a fully recyclable polymer called polyethylene terephthalate, or PET. It is used for medical devices, beverage bottles, as well as trays which help farmers bring fresh meat and cheese to the market.

China already produces more than twice the amount of PET it needs and more extra capacity is planned. China dumps increasing amounts of its surplus PET production on world markets. Argentina, Brazil, Canada, India, Indonesia, Japan, South Africa and the United States have already acted to counter this by imposing anti-dumping measures. If the EU does not do the same, the EU market alone remains exposed to even greater volumes of dumped product. Simply put, European industry will not survive.

At the end of March 2023 DG Trade opened an investigation into the dumping of PET originating in China. We support early provisional measures being taken. We can’t let what happened to other sectors happen to PET.

Imports from China, at predator dumping prices, are placing the very survival of our sector at risk. The dumped PET hurts equally both new and recycled PET and undermines decarbonisation and the circular economy.

Let’s be clear, Europe needs new flagship initiatives to protect fair trade. But high-profile initiatives must not come at the expense of existing investigations and established industries. The need to promote fair trade applies to all sectors equally. Commission action on the big cases must not obscure the need for effective measures in all cases. President von der Leyen must show that fair trade means fair trade for all.

Source: Euractiv.com