Brussels, 11/06/2007 (Agence Europe) - It is unlikely to be a simple courtesy visit when Trade Commissioner Peter Mandelson, the man charged with leading the EU's trade strategy, meets Bo Xilai, the Trade Minister of China, the world's new exporting power, in Brussels on Tuesday. Discussions on the rapidly expanding bilateral trade relations are not expected to be smooth because there are several issues causing friction between the EU and the China.
On the offensive side, Mr Mandelson, often criticised for his more flexible and consensus-seeking approach to Beijing than Washington would have liked to have seen, is likely to argue once again for reciprocal opening of Chinese markets, under the terms of the commitments made by China on accession to the WTO in 2001. In general terms, he will probably emphasise the need for fair competition, for rejection of unfair practices and for Beijing's acceptance of its responsibilities on the international stage, especially in multilateral Doha negotiations.
More specifically, on the offensive level, the Commissioner is expected to raise several issues. Firstly, Mr Mandelson will make his Chinese counterpart aware of his concerns over the EU trade deficit with China, and Beijing's inadequate measures to reduce this deficit. He is expected, therefore, to stress that China has to offer European exports better access to its market, in order to help rebalance trade and trade opportunities. Another important issue is the new partnership and cooperation agreement (PCA) negotiations, begun on 17 January to replace the 1985 bilateral agreement: Mr Mandelson is expected to stress, in particular, that an ambitious and balanced agenda must be set for trade and investment. The Commissioner will also call on China, which will be the main beneficiary of the Doha Round, to make commitments comparable with those made by other emerging economies like Brazil and India, notably on reducing customs rights on industrial products (NAMA).
On the bilateral level, Mr Mandelson will again underline EU concerns over intellectual property rights in China. Despite improvements in the situation, the EU expects more progress on reducing counterfeiting, improving the legal framework and ensuring payment of royalties (for example in the ITC sector). Although he has no intention of asking for an extension of the agreement of 5 September 2005, which set quotas to restrict Chinese textile exports temporarily, Mr Mandelson is expected to stress that there is a need for co-responsibility to ensure smooth transition on textiles after 2007. He will, then, call on Mr Bo to ensure, by means of a monitoring system, that exports to the EU do not once again rocket again in expectation of removal of the measure. Mr Mandelson will also raise the issue of soaring Chinese steel exports and the lack of sufficient Chinese exports of raw materials (coke, rare earth) to meet the requirements of European companies. Finally, he will call for the implementation of commitments on opening the (financial and telecommunications) services sector.
Defensively, China is expected to stress that it must have full market economy status (see EUROPE 9435) and that EU measures against imports of Chinese products of animal origin must be lifted. (eh)