Betraying frustration with China, EU leaders press for progress on trade talks
By Steven Erlanger
The European Union pleaded with Chinese leaders at a summit meeting Monday to put more effort into lagging negotiations on an investment and trade deal, an issue that has increasingly vexed the 27-member bloc. But the plea seemed likely to go unanswered by China, which has tight- ened control over its domestic economy and turned more combative in relations with Western powers.
China’s sensitivity about the source of the coronavirus, its moves against Hong Kong and its aggressive diplomacy to- ward European governments colored the atmosphere of the summit meeting. The videoconference setting reduced the ability to negotiate or pass quiet messages.
So the meeting, already postponed from late March, was never likely to produce a breakthrough on stymied efforts to conclude an investment treaty. While expectations were low for the talks, the first for the new European leaders, Com- mission President Ursula von der Leyen and Council President Charles Michel, they were still seen as frustrating.
The Europeans first had discussions with Premier Li Keq- iang, then with President Xi Jinping, China’s paramount leader. Afterward, the two European leaders made a plea for China to put more ambition and political weight behind lag- ging negotiations on a host of topics and to honor previous pledges. Asking for “a higher level of attention” from Xi, vonder Leyen said: “We have the intentions, the words put on paper, but we need the deeds.’’
“We continue to have an unbalanced trade and investment relationship,’’ she said, with little progress on Beijing’s commitments last year about market access. “We need to fol- low up on these commitments urgently and we also need to have more ambition on the Chinese side in order to conclude negotiations on an investment agreement.”
At best, European officials say, the talks could produce some more momentum from top leadership to break the im- passe on issues from state subsidies and technology transfer to climate change and equal opportunities for European com- panies. But prospects have been made more difficult as Xi has exercised tighter state control over the society and the economy.
The talks Monday did not produce a joint statement, nor did the Chinese government agree to any sort of joint news conference.
An account by Xinhua, China’s official news agency, suggested Xi had stuck to old themes. “China and the EU should be the two main forces of safeguarding global peace and stability,’’ he said. “China and the EU are the world’s two main forces, two main markets, two main civilizations. What we advocate, what we are opposed to, what we collaborate on, carry global meanings.”
China, which prefers to deal with each European coun- try individually, has always been a dilemma for Brussels. The EU is China’s largest trading partner, and China is the second largest for the bloc. But such interdependence also produces a kind of paralysis, with neither side particularly willing to risk that trade.
Josef Borrell Fontelles, the bloc’s foreign policy chief, said Monday that the West had been “a little naive” in expect- ing convergence from China. “Now China is more assertive and a global player,’’ he said. “It’s a partner” on issues like climate change, he said, “but also a competitor, and at the same time a rival.’’
In the past few years, Europeans have become less ideal- istic about China, favoring an investment screening process for member states that is voluntary but sends a message. Europe has also warned about Chinese investments in key infrastruc- ture and potential Chinese takeovers of strategically important companies, especially now that some are weaker because of the coronavirus recession.
At the same time, the Europeans have been careful not to be seen as backing President Donald Trump in his more ag- gressive position toward China, but trying to find some middle way, even if they share many of the same complaints.
“The Europeans are saying the same thing each time and expecting things to be different,’’ said Theresa Fallon, director of the Center for Russia Europe Asia Studies, a research institu- tion in Brussels. The Chinese “have been dragging their feet on this investment deal for seven years, and they are not going to deliver,’’ she said. “Beijing is focusing on the fragmentation of Europe, courting Germany. It’s more of a managed trade world than the EU imagines.’’
Trade, not foreign policy, is at the heart of the relation- ship. But that is where the European Commission, the bloc’s executive arm, has found considerable frustration. Promises made by China last year to improve behavior and create a more “level playing field” with Europe were good, “but imple- mentation has been lagging,’’ a senior European official said, speaking on condition of anonymity because the issue is delicate.
Technical talks on issues like unfair subsidies to state- owned enterprises; limited market access for European com- panies for automobiles, computers, telecommunications and biotechnology; China’s demands for one-sided technology transfers, limits on financial services and disagreements over ways to settle disputes are not making much progress, the of- ficial said.
Other disputes concern proposed changes at the World Trade Organization and China’s commitment to reducing car- bon emissions. As some officials noted, Xi is proud to be a father of the Paris climate accord, but China also is building coal-fired power plants at a great rate, raising questions about its commitments — even as the country invests heavily in re- newable energy.