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20th Apr 2019

China agrees to address key EU concerns in snub to Trump

  • Jean-Claude Juncker (l), Li Keqiang and Donald Tusk (r) briefing the press after the 21st EU-China summit in Brussels (Photo: Council of the European Union)

The EU and China agreed on Tuesday (9 April) on a joint statement addressing key European concerns at a summit in Brussels.

The EU and Chinese negotiators overcame deep divisions in an effort to show unity in protecting a rule-based multilateral trade system, as Beijing is entangled in a trade war with the US administration of president Donald Trump.

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EU council president Donald Tusk described the discussions on Tuesday as "open and honest", "difficult, but fruitful", and said the joint agreement bases the EU-China partnership on reciprocity.

"The joint statement is reached because we have commonalities on wide-ranging issues, convergence, and common interests, […] we will open up markets in both ways," Chinese premier Li Keqiang said after the 21st EU-China summit.

"Today we are making good on our joint commitment to uphold and update the rule-based global order that has served us so well," EU commission president Jean-Claude Juncker told journalists after three-and-a-half hours of discussions.

Juncker said the joint statement was the result of "over 50 hours of careful negotiations over the last ten days".

Tusk called it a "breakthrough" that China agreed to engage in discussions on reforming the World Trade Organisation (WTO) rules, which is a "key priority for Europe".

China also agreed to address EU concerns over state subsidies to industrial firms creating unfair global competition, and has committed to taking decisive steps this year on liberalising its market to conclude a bilateral investment agreement by 2020. Talks have been dragging on since 2013.

The EU is hoping the investment agreement will be key in protecting EU companies in China from discrimination, and will remove barriers for market access.

"The EU wants to invest more in China but needs rules to do so," Juncker said.

The two sides agreed to set up a "political mechanism" to check the progress of the investment talks and report back to leaders by the end of the year.

Li said fair treatment should also apply to Chinese companies in Europe, following a question on security concerns on possible Chinese hacking of 5G systems in Europe.

"We hope that Chinese companies [in Europe] can receive fair and equal treatment as well," Li said, adding both sides will take non-discriminatory approach when it comes to dealing with companies.

"We will not treat EU companies with discriminatory policy, including solely foreign-owned companies. Chinese companies should not be discriminated against in their EU operations, there should be a presumption of innocence" he said.

"So far we have not received complaints about espionage, especially on 5G companies," premier Li said, adding that Chinese companies do not infringe local rules.

Juncker said the EU is "not targeting specific vendors or countries", and that anybody who applies the rules can take part in the market, "the question is to combine security and innovation", he added.

The 12-page joint statement stated that EU and China "commit to build their economic relationship on openness, non-discrimination, and fair competition, ensuring a level playing field, transparency".

China also agreed that there should be no forced technological transfer as part of an investment.

On protecting geographical indications - aimed at defending European brands on the Chinese market - the two sides agreed to come to an agreement by the end of the year, but Juncker said "there is still work to be done" on the issue.

The 11th-hour agreement on the joint agreement highlights EU and Chinese determination to present a united front in the face of Trump's "America First" policy.

"Our cooperation makes sense for both sides," Juncker said.

The EU is China's largest trade partner, while the Chinese market is the second biggest for exports from the bloc after the US.

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