A few hours after the decision by American President Donald Trump to pull the US out of the Paris international climate agreement, the leaders of the EU and China, holding a summit meeting in Brussels on Thursday 1 and Friday 2 June, stated their commitment to the multilateral system, whether on climate change of on trade.
“We share a fundamental interest in upholding and strengthening the rules-based international system. And in these difficult times, we have a joint responsibility to protect this system and demonstrate its added value in all aspects of our relations”, said European Council President Donald Tusk after the summit on Friday afternoon.
“Our relationship is founded on a shared commitment to openness and working together as part of a rules-based international system. I am glad that we can meet here today and say this, loud and clear. It is one that recognises that together we can promote prosperity and sustainability at home and abroad”, European Commission President Jean-Claude Juncker had stated at the EU-China business summit earlier in the morning.
“We agreed that, faced with a changing international situation, with ever increasing instability, EU-Chinese relations must be stable and constantly consolidated”, said Chinese Prime Minister Li Keqiang after the summit. “On some points, there are significant differences between us. We believe that globalisation must continue to develop in a way that is inclusive, equitable and beneficial to all. The move towards globalisation is irreversible, the question is how to respond to it”, Li went on, before adding: “We believe that free trade must be defended. International rules have to be respected to ensure more equitable and fairer trade”.
The most significant political result of the summit was, according to Tusk, what Prime Minister Li had said on Thursday evening: the focus has to be on what the EU and China have in common rather than concentrating on what divides and separates them. That common ground was found but more time is needed, Tusk said, to be clearer on certain points. In general terms, this summit, he added, had been the most fruitful and promising the two partners had ever had.
Stated jointed leadership on climate... With the adoption of their very first joint statement on climate change and clean energy, setting out how the two partners – which, along with the United States, have the biggest CO2 emissions – will put in action their commitments under the international climate agreement concluded in 2015, the EU and China “have demonstrated solidarity with future generations and responsibility for the whole planet”, Tusk insisted, describing Trump’s decision as a “big mistake”.
Beyond the shared leadership on climate, Tusk hailed the deepening and strengthening of bilateral cooperation in many other areas from trade and investment to migration, international security, including North Korea, to security partnership in Africa. “China and the European Union are strategic partners. We have a stake in each other’s success”, he argued.
… but difficulty in calming friction over trade. The European and Chinese leaders sought to smooth over their differences on the “most controversial trade issues”: Chinese overcapacity in the steel, aluminium and other sectors, market economy status for China and how China is treated in EU anti-dumping investigations after the expiry of Article 15 of China’s protocol of accession to the WTO, and the lack of openness of the Chinese market to European investment. “We are able to narrow the position but we are not yet there”, said Juncker after the summit.
“We applaud the ambition of China’s reform path. We recognise that reforms have been made and that plans have been established. But we would like to see implementation speed up – so that your policies are in line with your world vision”, Juncker stated at the business summit, referring to the speech to Chinese President Xi Jinping promising greater commercial openness at the World Economic Forum in Davos at the start of the year.
On Chinese steel overcapacity, the EU again called on the Chinese authorities to speed up reform in order to foster more equitable market conditions and to reduce distortion resulting from the state’s tight grip on the Chinese economy. Talking to the press, Juncker also hailed the instruments in place – such as the G20 platform on steel overcapacity – as ways of encouraging dialogue and remedying the situation.
The EU was on surer ground at this summit with regard the treatment of China in its anti-dumping investigations. It set out the new anti-dumping methodology that it is currently developing, which will not favour any third country and will be in line with WTO rules. “We made clear our concerns on this issue. Everyone has to comply with the WTO rules. The EU has to apply the provisions contained in Article 15 of the Protocol of Accession of China to the WTO to show that it respects the rules. The EU says that it is amending its legislation to come into line with WTO rules which are non-discriminatory. If there are problems, we can discuss them”, Li said.
Lastly, with regard to investment flows, since there was no final statement, the EU and China have not cast in stone the reaffirmation of their desire to conclude an investment agreement, negotiations on which were launched on 2013 but have been deadlocked at the start of the second phase, covering market access, since the interim agreement reached in January 2016 on the scope of the future agreement. Negotiations are de facto continuing after a 13th round of talks last week. The EU had, however, hoped ideally that a timetable would have been established at the summit that would have allowed offers on market access to be exchanged in 2018.
After the summit, Juncker gave assurances that he had “highlighted the differences between the treatment European companies receive in China and how Chinese companies are treated in Europe”. “While we are very happy with the level of trade between the EU and China, we would like to improve the situation for our companies in China so that they can expand their businesses when they set up there. It doesn’t have to be this way, these are things that can be improved”, he said.
Though common understanding on trade matters was difficult, the EU and China agreed to publish a list of 200 geographical indications – 100 each – which it is planned to protect by means of an agreement to be concluded before the end of this year. (Original version in French by Emmanuel Hagry)