After learning that Matsk had become an employee of a Chinese company, Bovad and Emilene were no longer interested in investigating it. Even the coach was poached by others. They could fully imagine what the project could look like. Heinzel said before that Captain Cook's project was going smoothly and had completed the overall design of the sixth-generation platform. Now it seems to be a complete fool. No wonder Billtu abandoned European companies and turned to China for solutions.

Back at the EU headquarters, Bowad summoned Heinzel and revealed his talks with Matsk as soon as he met. Heinzel knew that his previous lies had been exposed, but he had no embarrassment. Instead, he said to Bowad angrily: "Mr. Bowad, now you should know how shameless the Chinese are, right? They spent a lot of money to pry our corners and let European engineers serve them."

"But this does not violate EU law," Bowad said.

Heinzel said: "This just shows that EU laws are flawed, and this set of laws cannot protect European interests at all."

"Sadly, we are not responsible for legislation." Bovard reminded.

"Maybe." Heinzel also knew that he told Bowad that this was meaningless, and legislation was a very troublesome thing, and Heinzel did not think he had the ability to change EU laws. Heinzel said to Bowad: "Mr. Bowad, I think the EU needs to take some measures to limit China's penetration into Europe. If they are allowed to develop like this, Europe will soon become a second-rate country."

Bovard nodded and said, "I feel the same way Heinzel. However, free trade is the philosophy of Europe, and we cannot engage in trade protection like Americans."

"We are not doing trade protection," Heinzel said. "We are just retaliating against countries that violate market rules. Over the past 20 years, the Chinese have snatched too much of our interests through various illegal means. I think it's time to change all this."

"Hmm..." Bovard responded without comment and signaled Heinzel to continue.

Heinzel said: "In terms of the sixth generation drilling platform, the Chinese people's technology was stolen from our European companies. They hired engineers who left European companies and these engineers brought the technology of European companies, which is the key to the Chinese people being able to quickly master this technology. We should crack down on such behavior."

"We are very willing to do this, but Billtu warned us that if we ban them from importing drilling equipment from China, the supply of local oil in Europe will be affected, and the result is equally unbearable for Europe," Bowad said.

"What if it's not banning imports, but just raising tariffs?" Heinzel asked.

"The result is the same, and Billtu will not accept this method. If the EU forces high tariffs on this import, Billtu will take the EU to court," Bovad said.

Pumai Company is a European company, and Billtu is also a European company. In order to protect the interests of one company, the interests of another company will be damaged. This company will definitely make trouble. The right to speak in the oil company should not be underestimated. Bovad cannot ignore the attitude of Billtu.

Heinzel also knew this. When Boward pointed out the issue of Captain Cook's project to him, he already knew that there was no room for maneuver on this matter. He made this suggestion at this time just to lay the groundwork for the subsequent requirements. This is how the negotiation is. You can make some very excessive requests first, and then make a slightly excessive request after the other party refuses, so that the other party will not be able to refuse again.

"Mr. Bowad means that in the eyes of the EU, oil companies are more important than manufacturing companies?" Heinzel asked.

How could Bovad take the blame? He shrugged and said, "What I want to say is that you are equally important. But you have wasted too much time on the drilling platform, so it's no wonder that Billtu has to consider cooperating with the Chinese."

“I understand the difficulties of the EU,” Heinzel said. “But I think the EU can use this project to do some deals with the Chinese.”

“What deal?”

"Use the open market of offshore oil equipment as a condition to exchange for the Chinese opening of the wind power market to European companies."

"Wind?" Bowad was stunned. "When did China close the wind power market for us?"

"They did not prohibit European companies from participating in their wind farm construction, but they stipulated a strict localization ratio for wind power concession bidding, requiring that the degree of localization of equipment for wind power projects built in China must be higher than 50%. We think this provision is unreasonable." Heinzel said.

Bowad nodded: "I know about this, and the EU has also negotiated with China on this matter... I mean, we are still negotiating at the moment. However, the Chinese have proposed that their wind farms are subject to government subsidies, so they have the right to make localization requirements. At present, we have a big difference on this issue and cannot be resolved in a short period of time."

The WTO rules are a very complex system. From a general principle, the WTO parties should give national treatment to foreign companies, that is, they cannot adopt a discriminatory attitude towards foreign companies in the procurement of goods and services. Under such principle, it is illegal to mandate the localization ratio.

However, the WTO Agreement puts forward an exception to the above provisions, that is, it involves government procurement. The government can adopt a policy of priority for domestic products. The construction of wind farms is a commercial act and is not considered government procurement. However, wind power grid access is subject to government subsidies, so it also has the characteristics of government procurement.

As for wind power subsidies, they do not violate WTO rules. Because wind power is a renewable energy, in order to control greenhouse gas emissions, the international community encourages countries to vigorously develop renewable energy. As one of the means of encouragement, governments can provide necessary subsidies to renewable energy.

EU countries also have subsidies for wind power. The Danish Ministry of Environment has provided 30% subsidies to wind turbine buyers since 1979, and later subsidies on the on-grid electricity price, which has led to the great development of Denmark's wind power industry.

China's wind power industry started late. In the 1980s, when Europe began to develop wind power on a large scale, China only built a few small-scale experimental wind farms by introducing technology. In the 1990s, China actively promoted the localization of wind turbines, introduced, digested and absorbed foreign wind power manufacturing technologies by establishing joint ventures with foreign wind power manufacturers, and gradually formed the ability to independently develop, design and manufacture large wind turbines. However, at this stage, the scale of wind power construction in China's domestic is still insignificant compared with Western countries. In 2000, the total installed capacity of wind power in the world was 17,800 megawatts, while China only had 344 megawatts, accounting for 2% of the world.

After entering the new century, China accelerated the pace of wind power construction due to environmental pressure and global greenhouse gas emission reduction requirements. In 2002, the National Development and Reform Commission began to implement the wind power concession bidding policy and promote the construction of large wind farms. In the following years, China's installed wind power capacity increased at a rate of 100% per year. By the end of 2017, China's installed wind power capacity reached 188gw, more than 500 times that of 2000, and its proportion of global wind power installed capacity increased to 35%.

That is, in the wind power concession bidding policy, the requirement that the localization rate of wind power units is not less than 50% is clearly put forward. The purpose is to promote the development of domestic wind power equipment, so as to prevent this huge industry from falling completely into the hands of foreign companies.

The wind power equipment industry in Europe is very developed. Therefore, the EU is naturally very resistant to the Chinese government's policy, and therefore negotiated with China's policy, believing that this requirement violates the national treatment clause in the WTO regulations. The Chinese government claims that encouraging enterprises to adopt clean energy and energy conservation and emission reduction through government intervention is a common practice for government governments, and projects that enjoy government subsidies can put forward localization rate requirements, which does not violate the WTO regulations.

The two sides have been arguing about this issue for a long time, and it is estimated that they will continue to be pulled down. The so-called World Trade Organization is actually a place to argue with each other. The World Trade Rules sound very high-end, but in fact they are patches and patches, because these rules have been drilled by various countries and can only be maintained by continuous patches.

The requirements for localization rate in the development of the new energy industry are not limited to China. In 2009, the Ontario Electric Power Bureau of Canada issued a regulation to provide some degree of government subsidies to power plants that use renewable energy to generate electricity. Among them, it is particularly stipulated that for enterprises that use solar photovoltaic power generation and large-scale wind power generation, the premise for enjoying government subsidies is that when they develop and build power generation facilities, they must purchase a certain number of locally manufactured products, which is called the "local content indicator".

In 2010, Japan and the EU respectively attacked this provision in Ontario and eventually resorted to WTO dispute settlement agencies. After several years of disputes, WTO finally ruled that Ontario's provisions violated WTO rules, but at the same time admitted that the issue was very complicated and that this jurisprudence cannot simply apply to other cases.

Bowad did not directly participate in the EU and China's dispute over new energy issues, but he knew a little bit of the difficulty. Heinzel's words about this matter naturally had to explain it.

Heinzel said: "We have always been paying attention to the negotiations between the EU and China. We feel that the EU's attitude in negotiations is too weak. The Chinese are obviously delaying time in order to win the opportunity to develop domestic wind power equipment. I suggest that the EU should tie up offshore oil equipment with wind power equipment. If the Chinese insist on the 50% domesticization rate on wind power imports, we can also require that the imported offshore oil equipment from China must include 50% of European products. I think Billtu should not object to this requirement."
Chapter completed!