Are EU-China relations back on track?

EU and Chinese leaders met in Helsinki on 9 September, against a backdrop of growing tensions on trade issues. Only a few days after the summit, the EU requested the establishment of a World Trade Organization (WTO) panel on the Chinese auto parts tariffs.

The summit launched negotiations for a new partnership and co-operation agreement which will "encompass the full scope of their bilateral relationship, including enhanced political co-operation". The 1985 trade and economic co-operation agreement will also be updated. This represents a compromise as the EU wanted a new and comprehensive agreement, while Beijing wanted merely to update the trade provisions.

It is nearly two years since the principle of a ‘strategic partnership’ between the EU and China was agreed.

The main question to be answered at Helsinki was whether the concept of a strategic partnership is still on the table. Both sides were unsure whether there had been a cooling off by the other.

Significant is that 13 paragraphs of the summit’s declaration addressed international issues, whereas the preceding Beijing declaration of September 2005 addressed only climate change, non-proliferation, regional co-operation and the WTO.

Although the joint statement gives the impression of accord, digging beneath the surface reveals a number of less consensual issues.

Emphasised were the importance of efforts to reform the United Nations and "strong support for a fair, just and rules-based multilateral international system", a determination to bring humanitarian assistance to the Lebanese people, the need for a comprehensive peace plan for the Middle East, the requirement for Iran to implement United Nations resolutions and a strong commitment to work towards the peaceful resolution of the North Korean nuclear issue.

The leaders stressed the importance of their relations with Africa and stated their "commitment to work together in favour of Africa’s peace, stability and sustainable development". But while the EU reaffirmed its attachment to the principles of good governance and human rights, the Chinese side emphasized the upholding of the five principles of peaceful coexistence, in particular the principle of non-interference into others’ internal affairs. Serious concern was expressed about the deteriorating security and humanitarian situation in Darfur. Transition from an African Union to a UN-led operation would be conducive to the peace. This required nimble drafting as there is serious disagreement over intervention in Darfur. The West sees China as impeding the cessation of genocide there. The Chinese government, for whom the principle of non-intervention in the domestic affairs of another country remains absolute, only accepts a UN force if Khartoum agrees.

Although both sides "expressed their satisfaction over the progress of the market economy status dialogue", China made it clear that it was unhappy about the EU’s failure to accord the status, which makes the country vulnerable in anti-dumping procedures. European Commission President José Manuel Barroso said that specific technical criteria concerning the influence of the state, accounting rules, bankruptcy law and reform of the financial services sector had to be met by China before a decision could be made. "These are relevant to determining prices and costs in anti-dumping. Once these criteria are fulfilled, we won’t wait a day," he said. Wen Jiabao, China’s premier, objected to the EU’s policy of linking "economic and trade issues with the so-called human rights issues".

The Helsinki declaration reiterated the importance of protecting intellectual property rights but failed to express the dissatisfaction actually felt in Europe over this. The importance of lifting the arms embargo was recognised although Beijing understands that this is not possible for the moment.

There is also substantial European dissatisfaction with market access. It is unclear whether there is sufficient realisation in China that failure to reciprocate on market access could fuel a trend of growing protectionism in Europe, which is likely to be inflamed if Beijing blocks a UN force being sent to Darfur.

It is not clear yet whether the ‘strategic partnership’ is back on track.

EU and Chinese leaders met in Helsinki on 9 September, against a backdrop of growing tensions on trade issues. Only a few days after the summit, the EU requested the establishment of a World Trade Organization (WTO) panel on the Chinese auto parts tariffs.