EU-China: WTO needs reforms

Despite differences, it is crucial that both sides are strong supporters of multilateralism

The 9th annual Europe-China Forum, held at TownHall Europe in Brussels, put the accent of the debate on 'Convergence, divergence and the vital space between'. This joint initiative of Friends of Europe, a leading think tank based in the Belgian capital, and the Mission of China to the EU, brought together policymakers, people from business and leading scholars from both sides to discuss key issues of mutual interest. 

Shada Islam, Director of Europe and Geopolitics at Friends of Europe, who moderated the forum, underscored that although being competitors in many areas, Europe and China have a shared interest in dealing with global challenges and tackling demands for reforming global governance.

At the EU-China summit in April, both sides resolutely backed the rules-based multilateral trading system with the World Trade Organisation (WTO) at its core, and the fight against unilateralism and protectionism, and committed to complying with WTO rules. They also reaffirmed their support for international peace and security through “intensified dialogue and cooperation” and peaceful dispute settlement in regional conflicts throughout the world.

How can the EU and China work together to reform the WTO and re-energise the multilateral trading order was one of the topics discussed. The participants also touched upon the important question of whether progress can also be expected in an EU-China investment treaty and a future free trade agreement, following the EU-China agreement on Geographical Indications (GI) signed on 6 November in Beijing. It will protect 100 European Geographical Indication products in China and 100 Chinese GIs in the EU.

“China and the EU are very important partners with relation to finding solutions not just for the usual trading relationship but more and more for the international challenges of our time,” said at the forum Phil Hogan, EU Commissioner-designate for Trade, who signed the GI agreement in his current role of Commissioner for Agriculture and Rural Development.

Naming the pressing issues, he pointed out that both sides have to work together to fight issues like climate change, strengthening the international peace and security, promoting sustainable development, supporting effective multilateralism through the WTO. Focusing on WTO, as the EU and China continue to benefit enormously by the multinational trading system, although “today the WTO is facing existential crisis”, he explained that this is linked to the organisation's difficulty in adapting to the new social and economic challenges posed by globalisation that may disrupt the only legitimate referee.

According to Commissioner Hogan the global economy can fulfil its potential only if it maintains stability and predictability of the rule-based international trading system. The EU is very committed to preserving and upgrading the multilateral order, he said, adding that the impression from the talks during his visit to Beijing, earlier this month, is that China shares this objective too.

The incoming trade Commissioner quoted EC President-elect Ursula von der Leyen, who said that “multilateralism is in Europe's DNA” and also called for the next WTO Ministerial Conference in Kazakhstan to prepare a 'Plan B' in the event that no consensus may be reached.

We want to do an investment agreement with China in 2020, but it will take very serious negotiations, he emphasised. “The EU is certainly open for business, we want to do business on basis of level playing field, we want to see better market access for European investors in China.”

We want to do away with the restrictions to investment, as well as to see the introduction of rules that insure non-discriminatory treatment of foreign investors, and this is what China expects from the EU, he said, noting: “We expect no different.”

Tackling climate change was also put in the forefront of the forum. Climate change and WTO reform are two key areas where EU-China cooperation has great potential, remarked Miao Lu, Co-Founder and Secretary General of the Centre for China & Globalisation (CCG). Despite differences, it is crucial that both China and the EU are strong supporters of multilateralism, she urged.

We must address climate change as an absolute priority, Piritta Asunmaa of the Finnish Ministry of Foreign Affairs said, accenting that progress towards a long-term EU strategy on climate change has been a priority of the Finnish Presidency of the Council.

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