EU and China pledge to deepen relationship despite trade tensions

European Commission President Jean-Claude Juncker receives Wang Yi, State Councillor and Chinese Minister for Foreign Affairs, on Friday (1 June). [European Commission]

The EU and China announced on Friday (1 June) that they would expand trade and investment cooperation amid the global trade dispute triggered by US tariffs.

But as part of the efforts to address outstanding trade disputes, Europe will present a complaint before the World Trade Organisation against China’s intellectual property practices, it confirmed on Friday.

“In the context of growing uncertainties in the world, it is even more important for China and the EU to deepen our strategic partnership”, said Wang Yi, state councillor and minister of foreign affairs of China.

He said the EU and China would expand cooperation in trade, investment, finance, innovation and sustainable development, as it brings “win-win results” for both sides.

Both sides also discussed global issues, including North Korea and Iran.

Wang’s visit to Brussels, in the framework of the annual EU-China high-level strategic dialogue, came on the heels of US President Donald Trump’s confirmation of additional tariffs against Europe and other nations’ steel and aluminium exports.

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President Donald Trump announced on Thursday (31 May) that the United States would slap tariffs on steel and aluminium from the EU, Canada and Mexico, prompting Europe to say it would respond with “counterbalancing measures within hours” in what amounts to a trade war with Washington.

Wang acknowledged the differences on trade issues but argued they were the result of the country’s development process and advocated finding a consensual solution through dialogue.

He stressed that Europe and China “need to be partners of respect and equality” and no geopolitical tension should impact the relationship.

“We have some issues between us, we discussed them at length over the last years and obviously this will continue to be issues we will address,” the EU’s High Representative for Foreign Affairs, Federica Mogherini, told the same press conference.

The EU’s top diplomat referred in particular to the issue of steel overcapacity fueled by Chinese factories, responsible for the drop of the metals prices and job losses across the world.

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The world’s most powerful nations risk failing to make enough progress on tackling steel overcapacity by an August deadline, which is seen by the United States as a potential reason to start a trade war.

Europe joined the US complaints against Chinese subsidies for its unproductive steelmakers. Brussels and Washington also shared concerns about Beijing’s policies as regards intellectual property.

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Global trade is in peril like never before. Over the past weeks, the world has entered a full-fledged trade war involving the largest economies (the US, China and the EU) on more than one front.

Trump confirmed on Thursday tariffs of 25% and 10% on steel and aluminium exports to the US respectively, from Europe, Canada and Mexico.

Both the EU and China agreed that the WTO “is and remains at the centre of a rules-based multilateral trading system,” said Mogherini.

The Commission intends to file a dispute settlement request before the WTO against the US tariffs and plans to activate its own tariffs against US exports worth €6.4 billion, to equal the economic impact of Trump’s duties.

Mogherini said the EU “is not at war with anyone”. “The EU is a peace project, including on trade,” she said, pointing to the numerous trade agreements the EU is signing.

But she added that the EU “has to defend its interest”. The EU’s response will be “reasonable, proportionate and in full compliance with the WTO rules and obligations”, she added.

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China’s massive Belt and Road Initiative is seen as a unique chance to strengthen economic cooperation between Beijing and Europe and a way to spur trade and the economies of the countries involved. But some consider it a strategic and self-interested tool for China to extend its sphere of influence.

Wang told reporters that China´s position is “not only trying to uphold China’s own interest but also international rules and the global free trade system”.

He said the Chinese government will continue engaging with the US to find “a mutually beneficial outcome” to the trade dispute.

“China is a responsible nation in international interactions, we always honour our words but we expect our partners to also keep their words,” he said.

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