"Today there exists no genuine dialogue between China and the EU on crucial commercial issues", say Messerlin and Wang, urging the EU to adopt a long-term trade policy towards China as its current focus on bilateral market access with the country is "ineffective and short-sighted".
Instead Europe should conduct its trade policy in the WTO, say the authors. In their opinion, the EU should adopt a tactic to promote its interests and at the same time "attract support from Chinese interests".
Messerlin and Wang make several recommendations for a new strategy:
- Make a "small bargain" that would involve "granting market economy status to China in antidumping" in exchange for China improving its WTO tariff implementation.
- Introduce an EU-China Partnership and Cooperation mechanism leading to a "grand bargain", including the reduction of China's barriers to inward foreign direct investment in services and the improvement of Chinese access to the EU services market "with the EU renouncing its right to use the special safeguard included in China's WTO Accession Protocol".
- Develop Sino-European procedures aimed at solving the questions "raised by China's Sovereign Wealth Fund operations and by some EU norms and standards".
- They advise Europe to trim its requests concerning intellectual property rights in particular.
