BRUSSELS (AFP) -The European Union, in a statement to be issued Tuesday, will call on China to adhere fully to its WTO commitments if it wants to enjoy balanced trade relations with its number one commercial partner.
“For the relationship to be politically and economically sustainable, China needs to demonstrate its commitment to open markets, fair competition and responsible leadership,” the EU is to say in a political orientation note, according to a European source.
It is also the message that EU Trade Commissioner Peter Mandelson will take to the Chinese government when he visits Beijing in early November.
The statement, to be issued by the EU executive commission in Strasbourg, will recall that “China is probably the single most important challenge for EU trade policy in the years to come.”
The 25-member European Union is China’s leading commercial partner, accounting for 19 percent of Chinese foreign trade. China today is the primary source of imports on the EU market.
But with a middle class increasingly attracted to European products, China is also a key market for the EU, which saw its exports to the Chinese market soar 69 percent between 2000 and 2005, a much more rapid expansion than with the rest of the world.
Tuesday’s statement will urge Europe “to develop and consolidate areas of comparative advantage in high-value and high-tech design and production.”
But it will also assert that in Europe “there is a growing perception that incomplete implementation of WTO (World Trade Organization) obligations and new barriers to market access are preventing a genuinely reciprocal trading relationship between Europe and China.”
The note will reaffirm the EU’s preference for resolving trade disputes “through dialogue and negotiation” but will also make clear that it “will not hesitate to make use of the WTO dispute settlement mechanism,” as it has done in disputes with China over its exports of shoes and textiles.
Expanding access to the Chinese market for European goods and investment will be a key objective in negotiations for a new EU-Chinese cooperation accord.
The EU is looking in particular for better access — even beyond Beijing’s WTO commitments — to the Chinese public sector.
Another area of keen concern to the European Union is securing greater protection for industrial property rights in China, a leading source of counterfeit goods.
“China must implement its WTO obligations both in law and on the ground and provide effective deterrence against counterfeiting,” the EU statement is to say.
The EU commission wants China to halt subsidies in the form of grants to businesses and to reform its banking system to eliminate soft loans, offered at low rates of interest, and other forms of non-profit credit.
Europe in addition is urging China to allow market forces to determine the outcome of trade in raw materials and energy products such as coal and coke.
The EU commission in its Tuesday statement will say it intends to “make a major effort to assist EU companies doing business with China.”
The panel is undertake a feasibility study on the opening in Beijing next year of a “European Center” and will extend until 2010 a program to teach Mandarin Chinese to EU officials.