The European Chamber of Commerce (ECC) in Beijing said on Monday that the European Union (EU) is unlikely to lift trade barriers against China this year as fears of losing as many as 10 million jobs across Europe are blocking efforts to grant the country market economy status (MES) in the World Trade Organization (WTO).

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The European Parliament recently started discussions ahead of a vote on China's trade status in the WTO.  Granting China MES would reduce tariffs and ease the flow of Chinese exports into the European market, but apprehensions over the loss of jobs in Europe are likely to affect the outcome of the vote, the ECC claims. 

"North or South"

"My personal observation of the parliament is that it is pretty much unified that China is challenging jobs in Europe and it doesn't matter whether you are a north or south parliamentarian, you are pretty much against it," said Joerg Wuttke, president of the ECC in Beijing.

Citing figures from the ECC's recently-issued report entitled "Overcapacity in China," Wuttke said Europe stands to lose as many as 100,000 to 10 million jobs if the EU recognizes China as a free market trading partner in the WTO.

In Brussels earlier this month, workers representing trade unions in 17 European countries took to the streets to demonstrate their opposition to granting China the status of a market economy in the WTO.

The unions blame both Russia and China for the unemployment which has dogged the continent for 19 consecutive months up until last December.

The unrest is making it difficult for European politicians to give China the status of a market economy trade partner in the WTO, Wuttke said.

Idle Assets

Chinese companies are burdened by overcapacity and low domestic demand, and China's steel manufacturers have looked to the export market to remedy the problem.  But EU steel executives say the flood of low cost metal from China has already forced the continent's steel industry to shut down many factories.

The Chinese government says it is tackling the problem by outlining a plan to close down factories that continue to make more than they sell.  The plan seeks to keep Chinese workers on wage rolls even as their machines are idle. 

"You should actually make your assets sweat and utilize them to 100 percent, but that is not the case here," said Wuttke, who insists Beijing's remedial measures are being held back by corrupt public officials.

China's steel sector produces half the world's steel: more than the United States, the EU, Russia and Japan combined. 

European steel manufacturers insist that China is dumping its surplus steel products into the continent's markets.  The allegations have prompted the EU to launch several anti-dumping investigations against China in recent months.

China has fired back at its accusers, saying the EU should elevate its allegations of steel dumping to the WTO. 

TagsChina-EU relations, China steel industry, World Trade Organization