@VoteWatchEurope Doru FRANبڑESCU director and co-founder of ... Doru FRANبڑESCU director and co-founder

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    @VoteWatchEurope

    Doru FRANȚESCU director and co-founder of VoteWatch @dorufrantescu

  • T h e E u r o p e a n retaliate. China has P a r l i a m e n t h a s made subs tant ia l recently said “no” to investment deals with g r a n t i n g m a r k e t both the EU and its economy status (MES) Member States, which to China. At the final EU pol i t ical el i tes v o t e , 8 4 % o f i t s inevitably take into Members backed the a c c o u n t w h e n EP document, which m a k i n g a made it look to the c o m p r e h e n s i v e outsiders like there is a analysis of the costs b r o a d c o n s e n s u s a n d b e n e f i t s o f against MES for China. u p g r a d i n g E U ’ s However, a closer look commercial ties with at the actual text the Asian power. This adopted and on how analysis looks at the MEPs voted on key polit ical dynamics amendments shows a behind this apparently much more nuanced technical decision. picture by country and political family.

    As expected, Beijing is not happy with this re su l t and subt l y indicates that it might

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    This analysis looks at the political dynamics behind this apparently t e c h n i c a l decision.

    2

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    ROMANIA

    BULGARIA

    HUNGARY

    POLAND

    FINLAND

    SWEEDEN

    UNITED KINGDOM

    IRELAND

    GERMANY

    FRANCE

    SPAIN

    ITALY

    AUSTRIA

    CZECH REP.

    SLOVAKIA

    LATVIA

    LITHUANIA

    CROATIA SLO

    VEN IA

    TH E

    N ET

    HE RL

    A N DS

    BELGIUM

    D EN

    M A

    RK

    P O

    R TU

    G A

    L

    GREECE

    ESTONIA

    MOST OPPOSED

    LEAST OPPOSED

    CYPRUS

    MALTA

    LUXEMBOURG

    TO CHINA

    Relative position of EU

    Parliamentarians to granting market

    economy status

    Italian and French MEPs lead the o p p o s i t i o n t o MES, the Polish and Dutch are among the least hostile

    The final text adopted by the EP says that China is not Denmark, Finland, Slovenia, Latvia, Estonia and

    a market economy and, as such, non-standard Luxembourg).

    This is shown by the motions tabled by the individual measures in trade investigations that determine

    political groups: the motions by ALDE and ECR price comparability should be kept in place (read:

    focused on the need for the EU to comply with WTO’s applications of higher customs duties on certain

    rules (read: to grant MES to China by the end of products). However, the motion approved by the

    2016). Additionally, ALDE and ECR did not mention in plenary does not explicitly state that a MES to China

    their versions of the document that China is not a should be denied in case the five key criteria are not

    market economy or that unilateral recognition of met (they are summarized ). Notably, an

    MES by the EU should not be granted. ALDE’s motion amendment to the joint motion that linked explicitly

    even recalled the importance of the trade with the grating of MES to the fulfilment of the 5 criteria

    China for European economic growth and the .

    creation of jobs.

    In fact, despite the apparent broad

    Comparatively, the versions proposed by the consensus, there are nuances in the

    European People’s Party (EPP), the Socialists positions of the European political families

    and Democrats (S&D) and the Greens all on this thorny issue. In particular, the groups

    mentioned explicitly that China is not a market which are traditionally the most favourable to

    economy. In this regard, the final joint motion is the principles of free market seem also the most

    textually more similar to the ones tabled by the EPP favourable to upgrading trade relations with China.

    and S&D (the two biggest political groups in the These are the European Conservatives and

    European Parliament). Notably, the EPP and S&D Reformists (ECR, the political family of David

    control the biggest share of EU governments, Cameron and Andrej Duda, governing over UK and

    including big and average-size countries such as Poland, respectively) and the Alliance of Liberals

    Germany, France, Italy, Spain or Romania. and Democrats (ALDE, whose members are leading

    the governments in the Netherlands, Belgium,

    here

    was rejected

    There are differences among EU political families

    3

    http://www.europarl.europa.eu/RegData/etudes/STUD/2016/535023/EXPO_STU(2016)535023_EN.pdf http://www.votewatch.eu/en/term8-china-s-market-economy-status-joint-motion-for-resolution-paragraph-6-amendment-7.html

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    Our analysis of the debates and votes of the TTIP, even against the position of their fellow EU parliamentarians shows that Italian and colleagues from the same European political French MEPs (from almost every political family. group) are the most active and vocal in their

    At the same time, the German parties do not opposition to granting MES to China. At the seem to have a common position at this other end, most Polish, Dutch and Swedish point. The Social Democrat Party (SPD, MEPs have shown a much more favourable junior coalition partner in Merkel’s stance. Interestingly, the Polish far-right government) followed its political group’s leader Janusz Korwin-Mikke was the only line and decided to abstain on the critical one during the debate who praised the amendment. For their part, Merkel’s own EU cheap steel coming from China and its Parliamentarians (the largest delegation in potential benefits for European consumers. the EP) did not support the critical O v e ra l l , o n l y 1 5 % o f P o l i s h E U amendment, although they still backed the Parliamentarians are clearly opposed to joint resolution stating that China is not a granting MES to China, whereas this figure market economy. The hesitations of the rises to no less than 97% in the case of the German politicians can be explained by the Italian EU Parliamentarians and 92% in the different interests of various sectors of case of the French. Whereas Berlusconi’s their society: while Germany’s labour force and Renzi’s MEPs abstained on a hostile (to seems to be among the most exposed to MES) amendment, French MEPs from every upgrading commercial ties with China, political group (with the exception of the far Germany-based importers are among the left) supported it. main beneficiaries of reducing custom

    Remarkably, the EU Parliamentarians of the duties, also considering that the port of French President Hollande (the French Hamburg is the second biggest point of entry Socialists) were among the most vocal for Chinese goods into the EU. against the MES (they were the only ones in

    Speaking of ports, Rotterdam is number one the S&D group voting in favour of a very in this respect, which perhaps explains the explicit statement against China’s MES). It is small appetite of Dutch politicians to oppose worth noting that the French Socialists are MES for China.generally opposed to free trade and they are

    also Divisions among Member States are also . observed when looking at the positions of the various eurosceptic parties. Whereas Also, the Hungarians of FIDESZ, which are most eurosceptics, in particular the Italian the EU Parliamentarians of Prime Minister ones, are strongly opposed to opening the Viktor Orban, are not supportive of MES to market to Chinese competition, the Polish China, despite the fact that the Hungarian Congress of the New Right, the Dutch Party Prime Minister is deemed to be tightening for Freedom and the German Alternative the bonds of his country with China. In this for Germany did not follow their groups’ case, the protectionist attitude of Hungarian position on this issue (i.e. they were more MEPs apparently played a more important favourable to the MES for China).role. In fact, Orban’s MEPs have also

    expressed strong reservations with regard to

    opposing the trade agreement with the United States (TTIP)

    4

    http://www.votewatch.eu/blog/ttip-under-pressure-what-are-the-forecasts/

  • The government in Beijing is more than now, but on the long run it is the overall anxious to get the EU’s anti-dumping state of the economy that will make or measures out of the way of its exports to break. In anticipation of the future trade Europe. After decades of impressive opportunities, since 2013 China has also economic growth, China is now facing less developed promising perspectives. The changing (Shanghai, trends in global trade have led China to Fujian, Guangdong). face over-capacity issues, ie. China

    I n t e r e s t i n g l y, C h i n a s e e s t h e needs markets to get rid of its stocks. establishment of trade blocks by the West Remarkably, China even faces a (TPP, TTIP, EU-Japan FTA, etc.) as a form of d e m o g r a p h i c p r o b l e m ( a g e i n g macro-regional protectionism (whereas population) which threatens the very Europeans see them as liberalisation of core of its (ideologically-based) social trade) that would leave China outside the policies and this has been made clear by main pitch. Consequently, Beijing is the abandon of its traditional one-child sensitive about EU’s next moves and, in policy. antici