EU Trade Commissioner Karel De Gucht: statement on mobile telecommunications networks from China

“The European Commission has taken a decision in principle to open an ex officio anti-dumping and an anti-subsidy investigation concerning imports of mobile telecommunications networks and their essential elements from China. This decision will not be activated for the time being to allow for negotiations towards an amicable solution with the Chinese authorities. I will revert to the College of Commissioners in due course.”

If an ex officio is finally launched, which product(s) would be subject to the investigation?

The product is mobile telecommunications networks and their essential elements (i.e. radio access network and mobile network core) designed and configured to fulfil the requirements of the EU telecommunications service providers, regardless of technology (2G, 3G, 4G, or any future technologies), whether completely or partly assembled or unassembled at the time of shipment and with or without dedicated software. Mobile telecommunication networks are used by telecommunications service providers to transmit, receive and transport wireless voice and data messages, manage the network and enable the provision of communications and data services and applications.

The end-user equipment (e.g. telephones, modems) is not covered.

What is the current value of such telecommunication network equipment exports from China into the EU?

China exports telecommunication network equipment to the EU market with a value of approximately just over 1 billion euros per year.

What is an ex officio trade defence case?

An ex officio trade defence action allows the European Commission to launch a trade defence investigation on its own initiative without an official complaint by the EU industry. This possibility is particularly important as it offers a ‘shield’ when the risk of retaliation against European companies asking for trade defence instruments is high. Such an action can be focused on either an anti-dumping or anti-subsidy investigation or both. Any launch of such an investigation is supported by prima facie evidence of unfair international trade practice and the economic difficulties caused by it.

What are trade defence instruments (TDIs)?

Trade defence instruments – anti-dumping, anti-subsidy and safeguards – address unfair practices occurring in international trade. Anti-dumping is the most frequently used form of trade defence. According to the World Trade Organisation (WTO), all its members, including the EU, have the right in some well-defined situations to impose additional duties on imported products to prevent damage to their domestic industry.

An EU industry can complain to the European Commission if it suffers from unfair competition as a result of an imported product being subsidised by its country of origin or being sold in the EU at prices lower than its market value. The complaint must be supported by evidence of the unfair practice and of the economic difficulties caused by it. The European Commission investigates the allegations and, if justified, proposes anti-dumping or anti-subsidy measures. In exceptional cases, the European Commission can launch an investigation at its own initiative – known as an ‘ex officio’ case.

Facts and figures on the European Union’s trade defence actions:

The European Union is a moderate user of trade defence instruments. In terms of trade volume, these measures only have impact on around 0.25% of EU imports. At the end of 2012, the EU had 102 anti-dumping (AD) and 10 anti-subsidy (AS) measures in force and an additional 19 anti-dumping and 6 anti-subsidy ongoing investigations initiated during the year. In comparison, according to the first-half 2012 data submitted to the WTO, the US have 232 AD and 50 AS measures in force, India – 222 AD measures, Turkey – 118 AD and 1 AS measure, China – 110 AD and 4 AS measures and Argentina – 87 AD and 1 AS measure.

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