EU and China to do more in common if the global scene gets worse

20th EU-China Summit in Beijing, 16/7/2018. Signing the Memorandum of Understanding on China-EU Circular Economy Cooperation. Jyrki Katainen EU Commission Vice-President (seated on the left) signs the Memorandum on behalf of the Union. The signing is witnessed by (standing from left to right) Donald Tusk, European Council President, Li Keqiang, PRC Premier and Jean-Claude Juncker, Commission President. Location: China,Beijing. © European Union, 2018 / Photo: Aaron Berkovich.

At a time of global trade, and not only, disorder, caused mainly by the US President of ‘America first’ Donald Trump, on 16 July in Beijing Europe and China held their 20th Summit. Both are targets of American trade aggression, but it seems the European Union is not yet ready to decisively join forces with China and loudly condemn the US, with a meaningful and strong relevant statement. Under this light, the question is: was the Beijing Summit of two global trade superpowers successful?

At this point, it must be mentioned that the European Union was represented by EU Council President Donald Tusk, the President of the Commission Jean-Claude Juncker and a number of pertinent Commissioners. Chinese Premier Li Keqiang was the host of the summit. The European leaders also had talks with the Chinese President Xi Jinping.

Was the Summit successful?

The answer to the above question – whether the Summit was successful – should of course be based on what was expected from it, in comparison to the actual results. A good approach to expectations could be the article written by the head of the Chinese Mission to EU, Ambassador Zhang Ming and published by this newspaper on 15 July, one day ahead of the Beijing Summit. The good ambassador included in one short sentence, what could be expected from it. He wrote, “China and the EU will consolidate consensus and trust, enhance cooperation, and send a joint message of defending multilateralism, free trade and investment facilitation”.

Now, one meticulous reader should compare that with the results. According to a Commission Press release “The Joint Summit Statement agreed by the European Union and China illustrates the breadth and depth of the EU-China relationship…”. Of course, this is the usual diplomatic phraseology, expressing good intentions but not containing much substance. The interesting part, though, is the one which speaks about concrete issues.

The Commission statement

The Commission Statement continues “…and the positive impact that such a partnership can have, in particular when it comes to addressing global and regional challenges such as climate change, common security threats, the promotion of multilateralism, and the promotion of open and fair trade…..”. To better clarify that, the “EU and Chinese leaders expressed their strong commitment to the rules-based trading system with the World Trade Organisation (WTO) at its core”. No doubt then that both sides clearly stand by what now counts in the disturbed global scene, order.

What about investments? On this issue it was the President of the Commission himself who clarified the state of affairs. Jean-Claude Juncker said “This is why it is so important that today we have made progress on the Comprehensive Agreement on Investment through a first exchange of offers on market access, and towards an agreement on Geographical Indications. That shows we want to create more opportunities for people in China and in Europe.” In short, EU and China have noticeably advanced their own relations, in order to give an example of what goodwill can bring to the world, and make it a less dangerous place.

Yes, it was successful

Let’s check in detail then whether the EU-China Summit was successful, according to the conditions set by the head of the Chinese mission to the EU. He set them as follows: “consolidate consensus and trust, enhance cooperation, and send a joint message of defending multilateralism, free trade and investment facilitation”. Up to now, we have proved that all those conditions have been more than fulfilled by the above excerpts of the relevant EU Press release. As for the crucial theme of investment facilitation, Juncker as quoted above spoke not only about an agreement but of a Comprehensive one, containing a ‘first exchange of offers on market access’, including the – hot for the Europeans – issue of the protection of Geographical Indications.

From the Chinese side there were also massive steps towards a closer and more balanced relationship between the two sides. Chinese Premier Li Keqiang, the host of the Summit, in a cordial statement said he ‘wants a more balanced trade with the EU’. This is a direct reference to the large trade surplus China runs with the EU, and Keqiang wishes to see it reduced. This is a genuine gesture of goodwill. However, very important issues were also discussed in the sidelines of the official meetings. So, there were also difficult moments too.

A difficult moment

According to a Reuters report, Chinese representatives told their European counterparts that China wants to cooperate more closely with the EU and their relationship to become “a standard of stability in the face of unilateralism and protectionism”. The European response to that was rather lukewarm.

Yes, together with China they support multilateralism and free trade, but to say China is a ‘standard of stability’ and this in clear distinction and against the US was too much for them. So, the EU didn’t go as far as undersigning a strong joint statement with China, even indirectly having Washington as a target. Neither did the EU elevate China on an equal footing with Europe as ‘a standard of stability in the face of unilateralism and protectionism’.

The EU asks for more openness

Instead, the Chinese representatives heard Juncker saying that “China could open up her economy”. Obviously, he meant this has yet to happen and he wanted Beijing to do a lot more on that front. By the same token, Donald Tusk, the President of the European Council, offered a much wider suggestion about combating unilateralism and protectionism but with less hard substance in it.

He said “It is a common duty of Europe and China, America and Russia, not to destroy this (global) order but to improve it. Not to start trade wars, which turned into hot conflicts so often in our history, but to bravely and responsibly reform the rules-based international order”. In this way, Tusk puts together the aggressor and the victims and only barely can a meticulous observer detect an indirect charge against America. So there were moments when the Europeans kept their distances from the Chinese.

No doubt then, the 20th EU-China Summit has considerably advanced the relations between the two mega-trading partners. This was probably not everything the Chinese side wanted, but the leaders in Beijing know to make the best of what they can get. Multilateralism and the rules based international order that the two sides pledged their true allegiance on, was enough. At least it shows their common determination to jointly do more, if the global scene becomes more menacing.

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