Monday

18th Feb 2019

EU envisages China free-trade pact

  • The five-year strategy aims at growth in Europe a greater opening up of the Chinese market (Photo: Trey Ratcliff)

The European Commission adopted on Wednesday (22 June) the main principles of a new EU template for China relations, which include the possibility of a free-trade agreement.

In the five-year horizon set out in the paper, the EU executive envisions "a deep and comprehensive" trade deal. But it said China would first have first to stop dumping exports in the EU at artificially low prices.

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China, it said, would have to "make significant, time-bound and verifiable cuts in industrial over-capacity, notably in the steel sector, to prevent negative consequences from unfair competition".

The commission also said that trade talks would follow "an ambitious investment agreement between the two sides."

It said it hoped to conclude the terms of Chinese participation in its €315-billion EU investment plan, the so called Juncker plan.

Chinese participation in the fund was already agreed in principle last year during a visit to Beijing by EU investment commissioner Jyrki Katainen.

Other areas of cooperation highlighted by the commission included research and innovation and "connecting the Eurasian continent via a physical and digital network through which trade, investment and people-to-people contact can flow".

More generally, the communication identified “major opportunities for the EU's relationship with China, in particular with the aim of creating jobs and growth in Europe as well as vigorously promoting a greater opening up of the Chinese market to European business."

But it did not mention the main topic of debate on China - on whether to grant it market economy status.

The commission will present its proposal on market status to member states in July, ahead of an EU-China summit, the date of which is yet to be announced.

The economy was the main focus of the commission's proposed strategy, but the paper also looked at diplomatic relations between the EU and China.

Both "should work more closely together in order to resolve international conflicts and foreign policy priorities," the paper said.

It added that "recognition of China's greater role in international relations and governance should be linked to greater adherence by China to international rules and standards."

It also said that "the EU should work with China to promote the universal advancement of human rights … at home and abroad."

The EU should "seek more common ground" with China on disarmament, non-proliferation, counter-terrorism and cyber security, it added.

The strategy paper will now be presented to member states in the EU Council and the European Parliament.

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