EU Consults On Future Trade Relations With China

by Ulrika Lomas, for LawAndTax-News.com, Brussels

12 May 2006

The European Commission on Monday published details of a consultation on a future strategy for trade and economic relations between the EU and China.

The Commission explained that:

"The spectacular rise of China is a major development of the new century. It will bring challenges and opportunities both for China and for the rest of the world. How citizens, business and governments react to these new developments will be key to turn global economic changes into new opportunities and benefits for all."

"This is why the European Commission is committed to develop an ambitious strategy for trade and investment relations between the EU and China in the years to come. It is with this objective in mind that the Commission is launching a public consultation exercise."

"China has enjoyed a 10% growth rate over the past 26 years. It is already the 3rd exporter globally. Trade relations between the EU and China are thriving. With more than €200 billion in 2005, the EU has become China’s top trading partner and China is now the EU’s second most important trading partner after the US."

"These developments present new challenges and opportunities for EU economic operators. The rapid growth of China opens a fast expanding market for EU exports, while EU investment in China will be key in ensuring global competitiveness for EU service and industrial operators. At the same time, the EU trade deficit with China has reached an unprecedented level of €100 billion in 2005 and China’s export capacity is putting increased competitive pressure on certain industrial sectors and employment in Europe."

The main legal framework for trade relations between the EU and China is provided by WTO rules. However, five years after its accession to WTO, China is nearing the end of the transition for implementing its accession commitments.

On the bilateral side, the relations are governed by the 1985 Trade and Cooperation Agreement. China and the EU have called for opening negotiations on a new EU-China Framework Agreement that would govern bilateral trade and investment relations into the new century.

In this context, the European Commission is preparing a Communication to the Council and the European Parliament on a strategy for EU trade and economic relations with China to be issued later in 2006. It will assess the future challenges in relations with China, and outline EU policies to maximise the opportunities offered to EU business by the economic rise of China.

Therefore, the Commission is inviting views from interested parties, such as public bodies, companies, trade unions, NGOs and citizens on the following themes:

• What are the most important opportunities for Europe in China’s economic growth and greater weight in international trade? What should the EU do to grasp these new opportunities?
• What are the challenges and risks for the EU from China’s rise? How should the EU respond to these challenges and risks?

Comment is invited on the matter until Friday 16 June.

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