China advised not to fret over EU-US trade pact

Updated: 2013-05-22 11:06

By Michael Barris in New York (China Daily)

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 China advised not to fret over EU-US trade pact

Karel De Gucht (left), the EU's trade chief, speaks to William Drozdiak, president of American Council on Germany, who introduced De Gucht and asked a few follow-up questions at the Council on Foreign Relations in New York on Tuesday. Michael Barris / China Daily

China has "no reason" to worry about an ambitious free-trade pact being negotiated by the United States and the European Union, because the two are already its biggest trading partners, the EU's trade chief said.

Trade Commissioner Karel De Gucht, after a talk in New York on Tuesday about the proposed Transatlantic Trade and Investment Partnership, or TTIP, was asked if the US and EU recognize that the scope of their pact - as much as a third of global trade - might make Chinese leaders nervous.

Repeating a statement in January from US President Barack Obama, De Gucht said the TTIP could "level the playing field in the growing markets of Asia". But he added that China should follow the lead of the US and the EU by opening up its markets further to help revive stalled global trade talks.

"They [China] have become a very important economy," De Gucht, a former Belgian deputy prime minister, said at the Council on Foreign Relations. "They have to take up global responsibility."

The result "will never be ideal, but they have also the same kind of duty that we have," he said of China and the West.

EU and US leaders announced in February their decision to work toward the TTIP, and negotiations are set to begin this summer. The two sides say reducing barriers to trade and investment through the agreement would spur growth and create jobs, helping each to emerge, respectively, from slow growth and recession.

In his talk, De Gucht cited EU data showing the TTIP could increase each side's GDP by as much as 0,5 percentage point annually in the short term.

Although the proposed pact appears to concern only Europe and the US, it also has implications for China and other emerging Asian economies. Jose Barroso, president of the European Commission, the EU's executive body, has said the TTIP isn't only about economic gains but could serve a larger strategic purpose to "rebalance" the US toward Europe after Washington's much-publicized "pivot" to Asia.

US and EU officials have said the trade agreement would help ensure that Americans and Europeans, and not the Chinese government, set standards on product safety and intellectual-property protection in years to come. De Gucht has been quoted as saying that unless Washington and Brussels concur on policies, in too many future trade cases, "we would be forced to accept Chinese standards".

On Monday, the New York Times reported that the Obama administration and the EU had decided to negotiate settlements with China over its alleged dumping of low-priced solar panels.

That plan would carve up the global solar panel market into regional chunks, the Times reported. If enacted, it could sharply increase prices of panels imported from China, the world's dominant producer, by requiring Chinese companies to charge more while limiting the total number of panels they ship.

When asked on Tuesday to comment about the newspaper report, De Gucht declined, saying no decision has been reached regarding panels. The White House declined to comment, according to the Times.

In a separate speech at the European American Chamber of Commerce in New York, the trade chief said there were no coordinated talks between the EU and the US over Chinese solar panels.

"We do not have a common battle plan. We have not discussed it," De Gucht was quoted as saying by Reuters. "We have not teamed up. We have not done so."

The EU has until June 5 to decide whether to impose anti-dumping and countervailing duties averaging 47 percent on Chinese-made solar panels. The US has already imposed duties of about 30 percent against Chinese manufacturers.

In his Council on Foreign Relations speech, De Gucht pointed out that the most recent negotiations at the World Trade Organization - known as the Doha round - have been suspended since 2011. The "shifting balance of the global economy", he said, means emerging economies "now have increased responsibility for the well-being of the overall system".

"Ensuring that negotiations move forward is part of that responsibility," he said.

Just as the EU and the US have advanced global trade in the past by expanding access to their markets, "this responsibility now falls on emerging countries, too - particularly in many economic areas where companies are global competitors", De Gucht said.

He blamed a "divergence of views about the different contribution needed from different players" for the WTO talks getting bogged down. A "new global covenant" on trade that recommits members of the global trade body to principles of open markets and addresses "new positions of each in the new global economy" is needed, he said.

michaelbarris@chinadailyusa.com

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