There are two reasons for the trade disputes. First is the imbalance in bilateral trade. The second is that the economy in Europe is losing its internal balance. Countries in South Europe, which have labor-intensive industries such as textiles, shoe-making and household electric appliances, cannot compete with imports from China.

These industries are giving up efforts to improve efficiency, and instead pursuing protectionist measures. The internal decision-making system of the EU, which is not perfect, raises the chances for trade disputes.

Due to the logic of collective action, which has fault itself, small textile and shoe-making producers in East and South Europe bound all EU members together to make the anti-dumping decisions and forced all consumers, importers, retailers and exporters to China to deal with their small industries’ depression, through a vote system leading to a consensus result inside the EU framework.

Under such circumstances, Chinese enterprises received unfair treatment in trade disputes. Let’s take the EU anti-dumping decision against Chinese shoes for example. The shoe-making industry, similar to the textile industry, is one of the most accepted marketized sectors in China. Compared to their Europeancounterparts, the Chinese shoe-making industry is more of a market economy. However, the anti-dumping department of the EU on January 12 refused to acknowledge the market economy position of the 13 Chinese shoe-making enterprises that accepting investigation. And it rebutted the Chinese enterprises’ request for individual decisions on different shoemakers in China. The EU, instead, announced an anti-dumping tariff on all Chinese shoemakers. What the EU has done was against the anti-dumping agreement of the WTO, which says that different anti-dumping measures, for example, different tariff rates, should be taken in accordance with different producers or exporters due to their different prices.

In previous anti-dumping cases involving Chinese producers or exporters, the EU at least acknowledged Chinese industries’ market economy position. Thus, the shoe case can be regarded as a major backslide. Although the EU announced that low-cost financing, a free tariff period and other government measures should be blamed, Chinese enterprises said that those were just excuses, and the reality was to the contrary. It is well known that Chinese products’ competitive advantages are from cheap labor costs, continuous technological progress and an economic scale beyond comparison, which have nothing to do with so-called “unfair government intervention.”

The freedom of shoe exports to the EU is a kind of rational right in accordance with China’s WTO commitments. In the WTO agreements with China, the EU promised to cancel import quotas on Chinese shoes since 2005. In any case, from 1998 to 2004, before the quota was canceled, the capability of EU shoe producers had already decreased from 1.1 billion pairs to 700 million pairs. Meanwhile during the 2001-04 period, the EU’s quotas on Chinese shoemakers only increased an average of 5 percent to 15 percent a year. Thus, it is very unreasonable to blame the decline of shoe manufacturing in EU countries on the “unfair competition” of Chinese enterprises. The fight over shoes between China and Europe was provoked by interest groups related to EU shoe-making industries, which is an open secret inside the international trade circle.

Although trade and economic ties are important parts of Sino-EU relations, they are not the only ones. Since 2003, when the two sides formed an all-round strategic partnership, China-EU relations have been working on shouldering bigger international responsibilities and having more active influences, after the geopolitical conflicts and strategic threats were out of the way. Based on this, a mature bilateral relationship will not be influenced much because of temporary disputes involving certain sectors or partial interests. It will continue to step forward.

In the long term, we hope that EU integrity can make greater progress, while the efficiency of decision-making will be raised. In the short term, we need to strengthen the official negotiation system with the EU and organize an ally against anti-dumping by uniting consumers, importers, retailers and exporters in the importing countries inside the EU, which can be applicable to other countries or regions in the world, because it can protect the legal rights of traders.