GT Voice: Protectionism won’t help retailers overcome challenge of e-commerce

Illustration: Liu Xiangya/GT

While the rise of e-commerce is a challenge shared by the global retail industry, succumbing to anxiety and resorting to trade protectionism is clearly misguided. What may appear as protection for domestic industries has negative consequences.

During an interview with RTL radio on Wednesday, Alexandre Bompard, CEO of Europe's largest food retailer Carrefour, claimed that the EU's proposal to charge a 2 euro ($2.36) handling fee on low-value e-commerce packages is "a joke" and suggested imposing a 100 percent tariff on such parcels, similar to the US approach. He also urged the EU to strengthen controls over Chinese parcels and implement them immediately.

His remarks lay bare the trade protectionist mindset, overlooking both the fundamental principles of the World Trade Organization (WTO) and the mutually beneficial nature of economic and trade relations between China and the EU.

If such tariffs were implemented, ordinary European consumers would be the first to suffer by paying more. Trade protectionism, which appears to be helping domestic industries, will actually harm consumers' interests and undermine market vitality. It will weaken market competitiveness, hinder company innovation and development, and trigger trade frictions and disrupt the international trade order.

Moreover, the impact of e-commerce is a common challenge in the global retail industry, not the fault of Chinese parcels. Globally, retailers that have actively embraced change and promoted digital transformation are thriving, while relying on trade protectionism to maintain the status quo is futile.

If anything, the approach of advocating for restrictions against Chinese parcels highlights the shortsightedness of certain business elites.

From a broader perspective of China-EU economic and trade relations, China and the EU share extensive common interests, and economic and trade cooperation has always been one of the driving forces for their economic development. 

The Chinese government has always been committed to resolving trade disputes through dialogue and consultation and safeguarding the multilateral trading system. The achievements by Chinese enterprises in the international market are the result of their own efforts and innovation. These achievements have not only brought development to Chinese enterprises but also injected new vitality into the European market.

Thus, while Bompard's remarks reflect the anxiety of some European retailers, they fall far short of representing the entire industry. In reality, numerous European companies recognize the immense potential of cooperation with China and have reaped tangible benefits through mutually rewarding partnerships. Should the EU adopt protectionist measures, it risks not only harming the interests of Chinese businesses but also inflicting damage on its own economy.

In response to a media question asked about European Commission's plan to impose a two-euro tax on small packages into the EU, and most of those packages come from China via digital platforms such as Temu or Shein, Chinese Foreign Ministry spokesperson Mao Ning said in May that China believes that an open and inclusive environment for international trade serves the interest of all. 

The healthy development of China-EU economic and trade relations is in the interests of both sides. China has always advocated for an open and inclusive international trade environment. It is hoped that the EU will honor its commitment to openness, providing a fair, transparent, and non-discriminatory business environment for Chinese enterprises.