“It is not possible […] to take an optimistic view of the trade relationship” between the EU and China, writes European Policy Centre founder Stanley Crossick in a May blog post reflecting on the High-Level Economic & Trade Dialogue (HED), which took place in Brussels on 7-8 May.
“According to the formal reporting, the HED called for an early and successful conclusion to the Doha Round, and pledged commitment to closer cooperation to keep trade and investment flowing in the economic downturn,” writes Crossick.
“[EU Trade] Commissioner [Catherine] Ashton stressed that there had been good discussions on trade and technology including intellectual property rights, customs cooperation and trade in food,” he states.
“The two sides also had good exchanges on climate change and energy issues, including the low-carbon economy, energy efficiency and energy performance standards,” writes Crossick.
Reflecting on the likely impact of the meeting on the overall bilateral relationship, Crossick writes that “from a Chinese perspective, the dialogue was therefore successful”. “There was lots of communication […] and an agreement to fight protectionism,” he explains.
But market access – “the EU’s biggest concern” – was not seriously addressed, Crossick says, “as the Chinese did not believe that HED is the right platform”.
Moreover, “from a European standpoint there was no progress on substance”. “Although there are active negotiations for a Partnership & Cooperation Agreement (PCA), there has been no progress in the trade negotiations,” he observes.
“China merely seeks a revision of the 1985 agreement, but the EU wants a new [one],” Crossick explains.
“Climate change is an area in which there are hopes of close cooperation,” he further writes. However, “Beijing regards wind power generation as a strategic sector,” meaning that foreign investment is not allowed, and “there is the serious obstacle of technology transfer”.
Thus “it is important to remember that EU-China trade is not a zero-sum game. China may be the greater beneficiary, but the EU is also substantially benefiting,” Crossick concludes.