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China-EU relations

China, EU vow to work more closely to defend global trade order

But Beijing and Brussels say they’re not seeking an alliance against Washington

PUBLISHED : Monday, 16 July, 2018, 3:00pm
UPDATED : Tuesday, 17 July, 2018, 6:20am

China and the European Union pledged to work more closely to defend the global trading system on Monday, although both sides said they were not seeking a coalition to counter Washington.

Leaders met at the annual China-EU summit in Beijing just hours ahead of US President Donald Trump’s meeting with his Russian counterpart Vladimir Putin in Helsinki – and just after Trump described the EU and China as “foes” of the US on trade and the economy.

Beijing and Brussels issued a joint statement after the summit, saying they were “strongly” committed to resisting protectionism and unilateralism and “firmly supported” the rules-based multilateral trading system centred on the World Trade Organisation.

That statement had not been forthcoming after leaders met at the past two summits because of frictions over issues such as China demanding market economy status at the WTO, and EU discontent over its steel overcapacity.

“It is a common duty of Europe and China, America and Russia, not to destroy this [global] order, but to improve it,” said European Council President Donald Tusk. European Commission President Jean-Claude Juncker was also at the summit, hosted by Chinese Premier Li Keqiang.

At a later meeting with the EU leaders, Chinese President Xi Jinping called on Brussels to work with Beijing to uphold global stability.

“China and the EU are … beneficiaries and guardians of the multilateral trading system,” state television quoted Xi as saying. “We should jointly maintain an open global economy.”

China, EU plan working group to revamp WTO and counter US unilateralism

Li made clear at the joint press briefing that China was not seeking to set up an alliance to counter US tariff pressure, after EU leaders and top advisers earlier repeated that they would not side with China against the US in the trade dispute.

“The talks between China and the EU do not target a third party and are not affected by a third party,” he said. “The trade friction between China and the US is a problem between the two countries. China does not want a trade war with the US – there is no winner in a trade war,” Li said, adding that the two sides would have to find a solution to their dispute.

Meanwhile, Trump told CBS News before he headed to Helsinki that the EU, as well as China and Russia, were all “foes” of the US.

“I think the European Union is a foe, what they do to us in trade. Now, you wouldn’t think of the European Union, but they’re a foe. Russia is a foe in certain respects. China is a foe economically, certainly they are a foe. But that doesn’t mean they are bad. It doesn’t mean anything. It means that they are competitive,” he told the broadcaster on Sunday in Scotland.

China proposes stronger ties with EU to counter US trade threats

By late afternoon on Monday, China’s commerce ministry announced it had filed a complaint to the WTO against Washington’s proposal last week to levy 10 per cent tariffs on US$200 billion of Chinese products.

China and the US have been locked in a trade war since early this month, when both countries slapped 25 per cent tariffs on US$34 billion worth of each other’s products. Another round of 25 per cent tariffs on US$16 billion of products is in the pipeline.

The tone of the joint statement was softer on long-standing disputes between China and the EU, such as China’s steel overcapacity, human rights and its activities in the South China Sea.

Beijing and Brussels agreed that steel overcapacity was a global challenge that required a collective response and pledged to step up cooperation through the Global Forum on Steel Excess Capacity. Western countries have complained that China has not fully disclosed its steel overcapacity data to the forum, instead remaining passive on the issue.

The EU has launched anti-dumping and countervailing probes into China’s steel products in recent years. It is also working to tighten investment scrutiny legislation, and has continued to complain about limited market access for European businesses in China.

China earlier filed a complaint to the WTO about the EU’s refusal to grant it market economy status, which would block the EU from levying high tariffs on Chinese products during trade disputes. The EU, meanwhile, is moving to revise trade defence legislation, removing the distinction between market and non-market economies altogether.

China pushes reluctant EU to form anti-Trump alliance in trade row

There was no mention of these issues in the joint statement on Monday – it instead highlighted the two sides’ commitment to cooperation by reducing market access barriers and speeding up talks for a bilateral investment treaty.

The European Commission president said China “could open its economy if it wishes”.

“It knows how to open up,” Juncker said, adding that there had been progress from Beijing to address the EU’s concerns about China’s industrial policies.

Beijing and Brussels also vowed to step up efforts to keep the Iran nuclear deal alive, and to push forward denuclearisation of the Korean peninsula. They also agreed to work together on Afghanistan and Syria, as well as other diplomatic and security issues.

On another source of trade friction, Li said China would improve protection of intellectual property rights by doubling the penalties for forced technology transfers.

“Those who maliciously violate intellectual property rights will be fined to the point of bankruptcy,” Li said, thumping the podium with his hand.

“This is also to protect the development of Chinese enterprises – without the protection of intellectual property, Chinese enterprises will be unable to develop. That would be harming ourselves,” he said.

Asked about China’s arbitrary detention of the mostly Muslim Uygur minority in the Xinjiang region, the European Council president said human rights was discussed in a “much broader context” and he had expressed the EU’s concerns about the human rights situation in China.

Tusk added that he had raised “specific individual cases” with Beijing, but did not mention Uygurs.

The two sides also called for dialogue and peaceful settlement of disputes in the South China Sea. In April, the EU’s head of security policy, Francois Rivasseau, told Australian media that the bloc could be an “honest broker” in the South China Sea disputes but did not rule out the possibility of European freedom of navigation patrols in the contested waters in the future.

Additional reporting by Keegan Elmer