Success of EU-China summit in the air as trade differences remain

Chinese Premier Li Keqiang meets Commission President Jean-Claude Juncker in Brussels in June last year, during the EU-China Business Summit. [European Commission]

The EU and China are speeding up preparatory work for their bilateral summit in Beijing in mid-July. The two sides are trying to agree on a joint position despite differences on trade issues including subsidies and market access.

The dispute over Chinese subsidies for steel production and the EU’s recognition of China as a market economy dynamited last year’s joint conclusions.

EU, China turn from trade to climate action to cement relations

The EU and China confirmed today (2 June) their decision to step up their cooperation against climate change. But disagreements over trade soured the end of the summit, as Beijing refused to sign the joint declaration.

Amid the trade war triggered by US President Donald Trump’s tariffs on steel and aluminium, and threats of new duties on cars, EU and Chinese leaders would like to put on a unified front against protectionism and support a rule-based multilateral system with the World Trade Organisation at its core.

But officials from both sides admitted that it was still unclear whether the two sides would succeed in agreeing on a communiqué at the 20th EU-China summit on 16-17 July.

China presses Europe for anti-Trump alliance on trade

China is putting pressure on the EU to issue a strong joint statement against US President Donald Trump’s trade policies at a summit later this month but is facing resistance, European officials said.

“China and the EU do have some specific concerns toward each other, and frankly speaking, they may not be resolved once and for all through one single summit,” said Chinese ambassador to the EU, Zhang Ming, earlier this week.

“However, it is always crucial to act in the spirit of mutual benefit,” he added.

The summit will follow China’s high-level meeting with 16 European countries to promote economic and investment ties, viewed with suspicion by some in Brussels and some member states.

China says 16+1 summits are good for EU

Annual summits between China and central and eastern European countries are beneficial to the European Union as a whole, the Chinese government told Bulgaria’s foreign minister, brushing off concerns that Beijing is seeking to divide the continent.

Europeans had complained that the Chinese government had not delivered concrete results in terms of market access or curbing subsidies, despite commitments made by Chinese President Xi Jinping.

Chinese president defends globalisation, rebuffs protectionism

As world leaders gathering in Davos on Tuesday (17 January) tried to make sense of recent economic and political turmoil, Chinese President Xi Jinping made a fervent case for globalisation.

Despite the stumbling blocks, both sides see an opportunity to make progress.

“The two sides are making intensive preparations,” a spokesperson for the Chinese mission to the EU said.

WTO reform

EU and Chinese officials referred to the recent high-level economic and trade dialogue as a signal of the positive momentum.

During that meeting, held in late June, both sides agreed on setting up a working group to discuss WTO reform in order to meet “new challenges” and develop “new rules” in fields such as industrial subsidies, the Commission said in a statement.

This is one of the top priorities not only for the EU but also for the US.

Summit conclusions detail reform plan for WTO to please Trump

The EU leaders agreed “in substance” on Thursday (28 June) on a set of proposals to improve the World Trade Organisation, which should pave the way for finding common ground with US President Donald Trump and de-escalating the ongoing trade dispute. But Italy blocked their formal adoption until the migration issue was fully addressed.

China’s vice-premier of the State Council Liu said after the high-level meeting that reform of the WTO to “keep it advancing with the times” is “in great alignment with the roadmap and timetable of China’s reform and opening –up drive”.

But the bloc still wants more action and fewer words. During the meeting, Commission vice-president Jyrki Katainen urged Lui to address the overproduction of steel and aluminium  caused by Chinese subsidies, which lies at the heart of the current trade tensions.

‘Tech’ fight

Katainen also told his Chinese counterpart to prevent new “overcapacity” in strategic areas such as artificial intelligence or robotics, prioritised in its ‘China 2025’ strategy.

Liu said after the meeting that both sides had a “candid exchange of views”.

Steel sector faces heated summer as trade war looms

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.

But as in previous occasions, China insisted that the issue is not excess production but the lack of global demand.

“The Chinese side believed that the fundamental reason to excess capacity is the contraction of aggregate global demand caused by the international financial crisis, and China adopted voluntary measures to increase domestic demand which contributed to stabilizing the world economic growth,” Vice-Premier Liu said.

The other bone of contention between Brussels and Beijing is market access, including the forced transfer of technology imposed on foreign companies by China.

EU considering taking China to WTO over IP practices

The European Commission is “closely examining” the option of filing complaints against China before the World Trade Organization for their rules and practices on intellectual property, a spokesperson told EURACTIV on Wednesday (4 April).

Brussels and Washington agree that this is used to build China’s dominant position in cutting-edge technology sectors under the ‘China 2025’ plan.

Trump said on 15 June that, as a response to the theft of American intellectual property, the US would slap tariffs on Chinese exports worth $50 billion.

A first round of 25% tariffs on 818 Chinese goods, worth $34 billion, entered into force yesterday.

Instead of tariffs, the EU decided to follow WTO procedures and submitted a dispute settlement before the Geneva-based institution.

EU and China pledge to deepen relationship despite trade tensions

The EU and China said on Friday (1 June) 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.

Political impetus

During the last high-level dialogue in late June, both sides agreed to exchange market access offers at the summit to try to inject “political impetus” to the slow progress made to seal a EU-China Comprehensive Agreement on Investment, the Commission said.

The products covered would include beef and poultry. Both sides would also agree on the reciprocal mutual recognition of the certification of organic products.

Liu said that the EU also agreed to “accelerate” the legislative work to come up with a timetable to recognise Chinese certification authorities.

Despite the outstanding issues, Katainen said he was “confident” that the preparatory work made during the dialogue could be “useful in paving the way towards a successful EU-China Summit in the economic and trade field.”

EU, China stumble into uncharted closer trade relationship

Just hours after President Donald Trump pulled the United States out of the Paris climate agreement, the EU and China tried on Friday (2 June) to find common ground to ease trade tensions that have divided them in recent months.

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