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TRADE WARS
China pledges open economy at EU summit
By Alex PIGMAN
Brussels (AFP) April 9, 2019

EU's Juncker demands fair trade from China ahead of summit
Brussels (AFP) April 9, 2019 - European companies should have the same rights in China as Chinese firms in Europe, European Commission head Jean Claude Juncker said Tuesday as an unusually tense EU-China summit kicked off in Brussels.

The EU-China summit every year brings Beijing's number two leader the EU's top officials together and serves as a litmus test on the state of ties between Europe and the Asian giant.

This year's meeting comes a month after the European Commission, the EU's executive arm, branded Beijing "a systemic rival" in a special 10-point report that stressed China's unwillingness to play fair on trade.

"The Commission has a new strategy ... and we will explain that in Europe we are insisting that European firms in China should enjoy the same rights as Chinese firms in Europe," Juncker told a conference just minutes before his meeting with China's Prime Minister Li Keqiang.

Despite the tensions, a European source told AFP the summit -- also attended by EU Council President Donald Tusk -- was set to end Tuesday with a joint declaration after both sides agreed to watered down wording.

Achieving a joint declaration would narrowly avoid a diplomatic dust-up and a repeat of two years ago, when China refused to sign on to a statement due to a spat over trade.

The annual meeting, where little is actually decided, comes as Brussels is trying to beef up its approach to the Asian giant on trade matters and security.

- Belt and Road concerns -

A major concern is China's ambitious "Belt and Road Initiative" (BRI), a massive network of transport and trade links stretching from Asia to Europe.

EU powers such as France and Germany are growing ever more uneasy with project after populist-led Italy joined the scheme, becoming the first G7 member to do so.

Italy's move ran against the Commission's 10-point plan proposing a more assertive relationship with Beijing.

It also underlined Europe's struggles to maintain unity among its 28 members when it comes to China, allowing the superpower to pursue one-on-one deals, especially with countries hungry for investment, such as Italy, Greece and eastern Europe.

More powerful EU states also go out on their own with China.

Last week, French President Emmanuel Macron hosted President Xi Jinping for a summit, though he also invited German Chancellor Angela Merkel and the EU's Juncker for one leg of the meeting.

But while Tuesday's meeting may not yield anything new in the EU's complex relationship with China, European officials insist it still has value in keeping up the pressure.

"There is broad agreement within the EU that it is important to communicate to China that we are at a point where we want to see... concrete steps forward on their willingness to work with us at the WTO," an EU diplomat told AFP.

"What is important is that we give a signal to China that the EU is partner but also a competitor and requires Beijing to make some steps."

China on Tuesday said it would push further to open its economy and deepen ties with the EU, which has grown increasingly wary of Beijing's influence in Europe.

EU Council president Donald Tusk hailed Beijing's new commitments at an EU-China summit in Brussels as a "breakthrough" with both sides committed to globalisation and pursuing international rules.

The annual meeting brings together China's number two leader and the EU's top officials and serves as a litmus test of the state of ties between Europe and the Asian giant.

This year's meeting comes at a sensitive time, a month after the European Commission, the EU's executive arm, branded Beijing "a systemic rival" in a special 10-point report that stressed China's unwillingness to play fair on trade.

It also lands amid big questions over Huawei, the Chinese high-tech giant that Washington wants the European Union to ban due to the firm's alleged ties to Chinese state security.

"On the basis of mutual respect and equality, we had intense discussions and reached a substantive joint statement," China's Prime Minister Li Keqiang said after the talks.

"It sets in clear terms both the direction and concrete goals for both sides."

The joint declaration was only agreed after frantic last-minute haggling, but it narrowly avoids the diplomatic dust-up seen two years ago when China refused to sign on to a statement due to a spat over trade.

In Tuesday's seven-page document that spans security, diplomacy and trade issues, both sides committed to "broader and more facilitated, non-discriminatory market access," in wording the Europeans saw as a concession from the Chinese on freeing their economy.

The EU is increasingly unhappy that markets in Europe are wide open to Chinese companies, while the equivalent is not the case in China.

"We are insisting that European firms in China should enjoy the same rights as Chinese firms in Europe," European Commission head Jean-Claude Juncker told a conference just minutes before also meeting with Prime Minister Li.

The declaration also said China and the EU would press on with efforts to reform at the World Trade Organization (WTO), including on strengthening rules against state subsidies for industry, a key concern of China critics.

"This is a breakthrough. For the first time China has agree to engage with Europe on this key WTO reform," Tusk said after the talks, adding that both sides would discuss progress on the issue at the next summit.

- 'Belt and Road' concerns -

The annual meeting comes as Brussels is trying to beef up its approach to the Asian giant on trade matters and security.

A major concern is China's ambitious "Belt and Road Initiative" (BRI), a massive network of transport and trade links stretching from Asia to Europe.

EU powers such as France and Germany are growing ever more uneasy with the project after populist-led Italy joined the scheme, becoming the first G7 member to do so.

Italy's move ran against the Commission's 10-point plan proposing a more assertive relationship with Beijing.

It also underlined Europe's struggles to maintain unity among its 28 members when it comes to China, allowing the superpower to pursue one-on-one deals, especially with countries hungry for investment such as Italy, Greece and eastern Europe.

After Brussels, Li was heading to Croatia for a so-called 16+1 summit that offers a chance for Europe's former communist countries to meet alone with Beijing, in a gathering that has ruffled feathers in the rest of Europe.

But more powerful EU states also go out on their own with China.

Last week, French President Emmanuel Macron hosted President Xi Jinping for a summit, though he also invited German Chancellor Angela Merkel and the EU's Juncker for one leg of the meeting.

In 2018, China was the EU's largest importer and the second largest destination for European exports. The Chinese trade balance is largely in surplus with the bloc at 184 billion euros ($207 billion), according to Commission figures.


Related Links
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TRADE WARS
IMF: all-out US-China trade war could lift Canada and Mexico
Washington (AFP) April 3, 2019
An all-out trade war would severely damage the US and Chinese economies but could also be a boon to countries like Canada and Mexico, the International Monetary Fund said Wednesday. The world's top two economies themselves would be the biggest losers in the event of a 25 percent hike in duties on all trade in goods, the IMF said in a report released ahead of next week's spring meetings, to be held jointly with the World Bank. Bilateral US-China trade could fall by up to 30 percent in the short-t ... read more

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