Mandelson gives China a chance

Peter Mandelson, the European commissioner for trade, will deliver a conciliatory message on trade relations with China at next week’s (28 November) EU-China summit in Beijing.

But he will also signal his readiness to get tough should the world’s biggest exporter fail to meet standards on market access and intellectual property.

The meeting comes at a time of heightened tension about global imbalances in trade and exchange rates.

A Commission official said: "The main message that he needs to pass on will be to tell China it is in our interests to have China at the table, inside the World Trade Organization system and playing by the rules as a major economic power. But if China does not take our message seriously, we have instruments at our disposal. We can enforce the rules more stringently."

Earlier this month, at a meeting with US officials in Washington, the commissioner spoke of his concerns about China. Citing the yawning EU-China trade deficit, now growing at $20 million an hour, he said that Beijing should fulfil its WTO obligations and trade fairly, reciprocating the market access on which its growth is founded and enforcing intellectual property rights.

Last month a letter that Mandelson had written to José Manuel Barroso, the Commission president, was leaked, in which he wrote in more aggressive terms, complaining that "the Chinese juggernaut is, to some extent, out of control". He called for tougher action against the trade giant and said that EU trade policy should be more closely aligned with that of Washington.

The US is seen to be taking a stricter line with China. This summer, a US senate committee supported legislation giving the government new powers to counteract China’s currency manipulation through a range of measures including suspension of government procurement contracts and more use of anti-dumping measures. Mandelson is expected to announce more stringent anti-subsidy action against China in a forthcoming review of EU trade defence policy.

The official said that China would have to accept that the EU will make fewer allowances for its emerging economy status. In future, it would be treated "like a normal trading partner". He signalled, however, that there would be no talk of any kinds of restrictions next week. "We have to have transparency and we have to have rules. [Mandelson] is also trying to see the situation on the ground," he said.

Concerns over China’s managed currency have been raised in the run up to the summit by the European Commission and EU finance ministers. Economic and Monetary Affairs Commissioner Joaquín Almunia will also attend the summit with European Central Bank President Jean-Claude Trichet and Jean-Claude Juncker, president of the Eurogroup, to talk about the artificially low level of the yuan.

Peter Mandelson, the European commissioner for trade, will deliver a conciliatory message on trade relations with China at next week’s (28 November) EU-China summit in Beijing.