EU in China: Bras, Steel, and the RMB.

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The “Bra Wars” of 2005 seem a long way off, but discussions have been going on in the background. Now it seems that the EU has agreed to end quota restrictions, and to set up a joint monitoring system for a year from 2008. Hopefully more stable development – and free trade – will follow.

Bras are one thing, but steel is another. And the EU is to press China to end subsidies for local producers. According to a Reuters report:

    “Speaking at a steel conference in Berlin, Michael Glos [Germany’s Economy Minister] said he understood why European steelmakers were concerned about the impact of cheap Chinese steel on business, and that the European Commission had agreed to investigate the matter.

    “We need fair rules in world trade and you cannot expect the German and European steel industries to compete against government subsidies,” Glos said. “That is why the European Commission will apply pressure, supported by us”.

    Separately, the head of China’s steel industry association CISA told the conference that consolidation would pick up and inefficient steelmills shut down by the end of the decade.

    The European steel association EUROFER is preparing to file as early as this month an anti-dumping complaint against China with the Commission based on its allegations that the country’s steelmakers are exporting at prices below production costs.”

While on the subject of the EU pressuring China, it is also interesting to note that the EU is contributing to the debate on the RMB. The IHT reports:

    “Failing to find unity over the euro’s strength against the dollar, European finance ministers sought instead to put pressure on China, urging it to allow the yuan to appreciate against other global currencies.

    A meeting of the finance ministers from the 13 countries that use the euro produced a rare protest at China’s exchange rate policy. Europeans usually leave it to Washington to pursue the subject with Beijing.”

Yes. And Washington usually has plenty to say! The question is which approach is more successful in the long run. A little give (on textiles), a little take (on steel), and a little of both (on the RMB) may make for a more productive mix.

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2 Responses to “EU in China: Bras, Steel, and the RMB.”

  1. Regional blogs » EU in China: Bras, Steel, and the RMB. Says:

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