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EU, China settle telecoms row

October 20, 2014

The European Union has said it's been able to end a protracted trade row with China, concerning the Asian nation's telecoms exports to the bloc. Brussels said any punitive action was now off the table.

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Huawei smartphones
Image: Imago/XINHUA

EU Trade Commissioner Karel De Gucht confirmed Monday the 28-member European Union had dropped a threat to levy punitive tariffs on Chinese telecoms exports, thus easing tensions between two of the world's top trading giants.

Brussels had argued that the speedy rise of Chinese manufacturer Huawei in the European telecoms equipment market could only have been achieved with illegal state aid, with the Asian company increasing its market share on the Continent to 25 percent recently from just 2.5 percent back in 2006.

But in a bid to remove obstacles on the way of a bilateral free trade agreement, Beijing agreed to discuss limiting its export credits to Chinese firms in the telecoms sector, signaling to the EU that it would heed internationally binding rules on corporate subsidies.

Competitive edge

"The EU and China have resolved the telecoms case," Karel De Gucht said in a statement. "The investigation into mobile telecommunications networks from China will not be pursued."

Both sides agreed to task an independent authority to monitor the market share of Chinese companies in Europe and European firms in China. The deal struck also contains a clause according to which companies bidding for publicly financed projects will in future be treated equally.

German trade with China intensifies

Imports of Chinese telecoms equipment to the EU are worth some 1 billion euros ($1.3 billion), bringing the Asian nation into fierce competition with Europe's sector heavyweights such as Ericsson, Nokia Siemens Networks and Alcatel-Lucent.

hg/nz (Reuters, European Commission)