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Europe beefs up trade armoury for long-term fight with China
- Trade weapons in the works will tackle everything from market access to forced labour, but getting them through will be ‘the litmus test’
- It’s being driven by a geopolitical shift amid Russia’s war in Ukraine, frustration with the WTO and hardening attitudes towards Beijing
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Finbarr Berminghamin Brussels
Galvanised by Russia’s invasion of Ukraine, technocrats and lawmakers in Brussels are dotting the i’s and crossing the t’s on a muscular arsenal of trade weapons for what they see as a longer-term battleground with China.
Many of the instruments have been years in the making, but have been given fresh impetus in a newly geopolitical, wartime Europe.
The “toolbox”, as it is termed in Brussels, will tackle everything from state subsidies to market access, from economic bullying to carbon emissions, from deforestation to forced labour, and from lopsided investment rules to forced technology transfer.
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Frustrated by the World Trade Organization’s (WTO) failure to deal with “problems that go to the heart of China’s state capitalism”, a senior EU trade official believes that the tools, if adopted, “would not leave significant gaps” in its trade armoury.
“But getting all this stuff on the books will be the litmus test,” they added.
It marks a remarkable turnaround from an online photo opportunity less than 18 months ago, which captured awkwardly smiling European leaders with Chinese President Xi Jinping, after giving political blessing to a bilateral investment agreement that took more than seven years to negotiate.
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