EU officials hopeful after China makes a ‘political commitment’ to expand firms’ access to markets

The optimistic tone of talks between EU and Beijing officials contrasted with the chill that growing China-US tensions have put into the global trade climate

PUBLISHED : Thursday, 10 May, 2018, 2:07am
UPDATED : Thursday, 10 May, 2018, 1:58pm

Top European trade officials said they have secured a “political commitment” from Beijing to increase EU firms’ access to China’s automotive and financial marketplaces, providing a note of optimism at a time of heightened China-US trade tensions that have darkened the global trade climate.

“I am … more optimistic today than I was three days ago when I came here with the delegation from the European parliament about the fact that we can build on our cooperative approach with our trade relations [with China],” said Iuliu Winkler, the European Parliament standing rapporteur who was part of a seven-member EU delegation that visited the capital for trade talks.

While the EU finds itself caught in the middle of the escalating conflict between its two largest trading partners – the United States and China – it is also dealing with US President Donald Trump’s threat to impose steel and aluminium tariffs on the European bloc.

The Trump administration last week decided to postpone imposing punitive tariffs on the EU until June 1, but there is no guarantee the sides can reach an agreement that would further extend the deadline.

Bernd Lange, who led the EU’s delegation to China, criticised the White House’s recent actions on long-time military allies and friends as “unilateral” and “illegal”, while painting a rosier picture of the EU’s trade relations with China. 

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“The world trading system is under threat,” Lange, who also chairs the International Trade Committee, said at a Beijing press conference after three days of discussions that wrapped up on Wednesday.

“There is one big trading partner [that] is undermining the world trade system with tariffs and its rule of power. Both China and the European Union stick to the world trade system and the multilateral system … and try to avoid any unilateral measures because these would affect all our trading partners,” he said.

Besides receiving China’s “political commitment” to ease European companies’ access to China’s automotive and finance industry, Winkler said the delegation also saw progress made in bilateral negotiations on an investment agreement, levelling the playing field in China on trade and Beijing’s enforcement of intellectual property laws.

Further talks could take place in a meeting between China’s vice-premier Liu He and European Commission vice-president Jyrki Katainen, with results possibly being announced during the EU-China summit in July, Winkler said.

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Before the delegation’s visit, Trump’s actions on a host of issues, including the trade conflict and taking the US out of the Paris climate accord, had drawn the EU and China closer. On Tuesday, the US president pulled America out of the Iran nuclear deal, a move that was expected to further solidify EU-China ties.

But at a separate press conference on Wednesday, European Ambassador to China Hans Dietmar Schweisgut struck a tougher tone by calling on China to do more to create a level playing field for foreign companies operating in the country.

“The European Union is committed to act on the basis of international law and the framework of the WTO and we are against any unilateral action which does not conform with the WTO,” Schweisgut said.  

“But we have also made it clear that we share many of the concerns with the United States … on overcapacity, technology transfer and some important market access issues.”  

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Schweisgut asked Beijing to make a tangible effort to keep the promise that President Xi Jinping made during the recent Boao Forum and at Davos last year, to create a “transparent and more predictable” business environment for European firms in China.

“We do hope that there will be a timetable and clear indications that those promises and commitment will be implemented,” he said.

“It would be good if China could send a clear signal in difficult times [of] its commitment to globalisation and translate [that pledge] into actions.”