Climate change

What’s holding back China and EU on climate change agreement?

Where they agree and disagree on other important issues

PUBLISHED : Saturday, 03 June, 2017, 12:28pm
UPDATED : Tuesday, 13 June, 2017, 7:40pm

Divisions over trade have prevented China and the EU releasing a much-hyped separate statement on cooperation to fight climate change. Below are some of the main issues in their relationship, and where both sides agree, somewhat agree and disagree:

Areas of disagreement

EU anti-dumping cases and China’s market economy status: The influx of cheap Chinese goods to Europe triggered a great number of anti-dumping and anti-subsidy investment and tariffs by the EU, most notably on Chinese psolar energy products and steel.

Despite Beijing’s protest, the EU did not grant China “market economy status” by the end of 2015 according to its accession protocol to the World Trade Organisation, which would place Chinese products in a better position in anti-dumping cases.

According to reports, the separate statement was dropped because of China’s insistence on having the EU’s eventual recognition of China’s Market economy status as a condition for the joint statement on climate change.

Protectionism and reciprocity issues: European companies have complained that in contrast to the openness Chinese investors enjoy in Europe, limited market access is affecting their business in China and has resulted in slowing investment growth. They are also unhappy with what they say are discriminatory market regulations against foreign companies and unfair competition with Chinese state-owned enterprises.

China-EU pledge to fight climate change, but formal agreement derailed by trade dispute

China’s rule of law and human rights: The EU regularly voices concern over China’s human rights situation. It also connects export controls over weapons and sensitive high-technology, which have been imposed on China for decades, to human rights issues.

South China Sea: Beijing claims most of the South China Sea but the EU has repeatedly expressed concerns over China’s assertive expansion, in particular massive land reclamation in the contentious waterway through Europe’s trade with East Asia passes, and the effect of on freedom of navigation. The bloc has urged Beijing to uphold international law as it seeks a bigger global role after an international arbitration tribunal ruled that Beijing’s South China Seas claims were invalid.

Areas of agreement

Climate change: Chinese and EU leaders have vowed to work together to uphold the Paris Accord on climate change, to fill the vacuum left by the US withdrawal, with both parties saying US President Donald Trump’s decision to pull out of the accord was “a big mistake”.

Free trade and globalisation: As two of the world’s three biggest economies and leading traders, China and the EU today champion free trade amid a global trend of protectionism. The EU reconfirmed its commitment to openness and multilateralism as their core values, while Chinese leaders advocate globalisation and propose that they play a leading role.

The two both stress the importance of global institutions such as the United Nations, WTO and the G20 to provide effective multilateral global governance in solving conflicts and disputes.

China and EU vow to defend free trade at talks in Beijing

Economic cooperation for prosperity: The EU is one of the top five providers of foreign direct investment (FDI) to China, accounting for nearly 16 per cent of total inflows, while the EU is the most important destination for Chinese outward investment, with a 19 per cent share. The two sides are working towards a comprehensive agreement on investment treaty.

EU nations and China are also looking for connectivity in each other’s flagship investment initiatives, the Investment Plan for Europe and China’s “One Belt, One Road” initiative.

Denuclearisation of the Korean Peninsula: EU and China both urge the removal of nuclear weapons in the region. EU also supports the Beijing-initiated six-party talks on the North Korean nuclear crisis.