The European Parliament last Thursday passed a resolution urging the EU not to give China what's known as Market Economy Status. Recognising China as a market economy would prevent Europe from intervening on import prices and hence -- slash many tariffs. But the debate in the European Union on China’s market status is far from over.
It’s a vote that united politicians from all political spectrums. In a 546 to 28 vote -- the European Parliament soundly rejected giving China Market Economy Status.
"So this is kind of a difficult situation. China feels this is a political decision, whereas in Europe they feel they look at the Chinese economy and say it’s not a market economy," Theresa Fallon with European Institute for Asian Studies said.
Granting China Market Economy Status—or M-E-S—would increase trade between Europe and China and possibly pave the way for a free trade agreement. But Members of the European Parliament voted down granting China MES because they fear it would flood Europe with more inexpensive Chinese goods—and in turn terminate jobs on its home soil.
A report by the Economic Policy Institute projects 3.5 million European jobs would be lost if China gets its MES status. China though says the EU’s agreement with the World Trade Organization includes automatically giving China MES this year.
The Parliament’s vote was non-binding. The EU executive branch—the European Commission—will continue to see if China deserves MES.
"The work on this issue continues. Now we are building and collecting the relevant information to take a decision and go back to this issue before summer," European Commission spokesperson Daniel Rosario said.
But with such a strong message coming from Parliament—some wonder if Europe’s lawmakers can’t be convinced to change their minds on MES and China.
"I think China will do everything in their power to lobby and convince them—but as the vote demonstrated there’s overwhelmingly popular sentiment not to support it," Fallon said.
The European Commission says it will make projections on how many jobs could be lost in every single EU country before it either comes out saying it supports or rejects granting China MES. China is hoping it’s granted MES by the end of this year.
