Despite European protests at the slowness with which the Chinese market is opening up and distortions due to the massive intervention of the Chinese state, the European Union and China adopted a united front in support of multilateralism and free trade at the 20th summit in Beijing on Monday 16 July.
The leaders of the EU - the President of the European Council, Donald Tusk, and the President of the European Commission, Jean-Claude Juncker - and the Chinese Prime Minister, Li Keqiang, reiterated their support for the multilateral trade system governed by the World Trade Organisation (WTO) and their commitment to work together to reform it.
We agree that under the current international circumstances, it is important to defend multilateralism and free trade, Li summed up.
Bilaterally, the Beijing summit resulted in an exchange of offers concerning access to the market in the framework of negotiations for an investment agreement. These negotiations, which launched in 2013, have made slow progress in their second phase on market access since an agreement was concluded in January 2016 on the scope of the agreement.
On investment as well, the summit also saw the signature of a memorandum of understanding between the European Investment Fund (EIF) and the Chinese Silk Road Fund, to confirm the first CECIF EU-Chinese co-investment on developing synergies between the Chinese One Road, One Belt project and the investment plan for Europe.
No free-trade talks in sight. Although welcoming the pledges of the Chinese President, Xi Jinping, for increased access to the Chinese market for foreign businesses, the EU did not forbear to recall the ongoing grievances of its economic actors established in China.
Addressing the EU/China business summit, Juncker called for the bilateral relationship to strengthen and increase in reciprocity. He stressed that too many European businesses are experiencing major difficulties in accessing the Chinese market and do not enjoy the same conditions of openness as those available to Chinese companies in Europe.
It is very much in China's interests to create a more attractive investment climate and put an end to the forced technological transfer imposed on 20% of European businesses in China, Juncker said, on the basis of the most recent report by the European Chamber of Commerce in China (see EUROPE 12046). He recalled that European investments in China fell from $13 to $7 billion between 2014 and 2017, which is not the pace hoped for.
This lack of economic reciprocity is therefore currently deterring Europe from considering negotiating a free-trade agreement. We have not decided to launch an impact assessment with a view to a free-trade deal, we have no mandate from the member states in any case. I cannot see any prospect of this in the immediate term, Juncker stressed.
Agreement on geographical indications hoped for in October.
On the other hand, the EU and China agreed to speed up talks on a cooperation agreement in the field of protection against counterfeiting or geographical indications, seeking to conclude by the end of October. Juncker stressed that such an agreement would deepen the trade relationship between the countries whilst reinforcing their links of mutual trust and would clearly demonstrate their joint commitment to the international rules, particularly in the key sector of intellectual property.
The EU and China also agreed to step up cooperation in the framework of the OECD Global Forum on Steel Access Capacity.
In the field of food safety, the EU and China agreed to promote the highest food safety standards, taking account of the principle of regionalisation, and pledged to expand access to the market for food items.
Finally, the Beijing summit chalked up further progress in customs cooperation, with signatures on a 2018-2020 action plan for customs cooperation in the field of intellectual property rights and on an agreement between the European anti-fraud office (OLAF) and the Chinese general customs administration to reinforce cooperation in tackling transhipment fraud, the illegal trafficking in waste and under-evaluation fraud. (Original version in French by Emmanuel Hagry)