Beijing warned of EU's trade frustration

PUBLISHED : Friday, 23 November, 2007, 12:00am
UPDATED : Friday, 23 November, 2007, 12:00am

Anger is rising in Europe, says envoy

The European Union's top trade official yesterday warned of rising 'anger and frustration' across Europe over trade relations with China, questioning Beijing's sincerity in forging free and fair commercial relations.

Speaking to the South China Morning Post on the eve of a six-day trip to Beijing and Shanghai, EU Trade Commissioner Peter Mandelson said he would be demanding action to level the playing field.

'I want to see discrimination against our goods and services end,' he said. 'I want to see proper rights ... respected for all European businesses and I want to see the legal system used to protect our intellectual property rights, not facilitate their abuse.'

Saying he welcomed China as a 'growing beneficiary' of the global trading system, with greater power comes greater responsibility.

'China has got to earn its place in the international trading system, not simply by taking advantage of it ... but to make sure that it is providing a level playing field and proper market access,' Mr Mandelson said.

'Otherwise, that growing deficit is going to make people increasingly angry and resort to the sort of emergency action that we want to avoid.'

He warned of worsening regulatory barriers and priority given to domestic mainland firms over European business.

Mr Mandelson did not specify what type of action could be considered but noted a range of trade defence instruments and dispute settlement action available under World Trade Organisation rules.

He warned of both rising public hostility and frustration among European governments that would put him under pressure to shut European markets to mainland exports.

Europe's trade deficit with China has soared and the euro has strengthened against the yuan, which Mr Mandelson says is undervalued.

The EU bloc is China's biggest trading partner - a fact to be noted at next week's 10th EU-China summit in Beijing.

Mr Mandelson said he did not want to make threats but Beijing had to understand the situation was unsustainable.

While he repeatedly urged a strengthening of the yuan, he warned that currency policies were not a panacea for the plethora of trade issues.

Mr Mandelson also demanded better enforcement action against counterfeiting.

'I don't think they are adequately matching the sincerity which we have brought to our dialogue and co-operation,' he said. 'I have found there is an increasing number of procedural dead ends and dialogue that never ... leads anywhere.'

The trip by Mr Mandelson and European Commission President Jose Manuel Barroso follows talks by senior trade officials in Beijing last week.

Mr Mandelson said he was alarmed to read official reports from the session suggesting Europeans needed to go to more trade fairs and become more competitive, saying Beijing officials were 'ignoring realities'.

The EU officials will be meeting top state and municipal officials. It is believed that Mr Mandelson will meet Commerce Minister Bo Xilai , widely expected to be named Chongqing party secretary soon.