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Trade war

China cozies up to EU with support for WTO reform

Beijing pivots to Europe as trade war with US heats up

European Council President Donald Tusk, Chinese Premier Li Keqiang and European Commission President Jean-Claude Juncker met Monday in Beijing for the 20th China-EU summit.   © Reuters

BEIJING/BRUSSELS -- Chinese and European Union leaders on Monday called for a revamp of the World Trade Organization to safeguard the multilateral trade system, a sign of Beijing's efforts to ingratiate itself with the bloc amid trade tensions with the U.S.

European Council President Donald Tusk and European Commission President Jean-Claude Juncker met with Chinese Premier Li Keqiang in Beijing for the 20th China-European Union summit. The EU officials also spoke that evening with Chinese President Xi Jinping.

China and the EU have the joint responsibility to safeguard the rules-based international order, advocate multilateralism and support free trade, Li told a joint news conference after the meeting, implicitly positioning Beijing and Brussels in opposition to the protectionism of U.S. President Donald Trump.

"In light of new problems and issues, we need to improve the [international] governance system, including the WTO," Li said, touching on a point heavily emphasized by the European side.

"The EU is committed to working toward the modernization of the WTO and calls on all partners to contribute positively to this goal," Tusk said at the news conference. He cited industrial subsidies and intellectual property issues, including forced technology transfers, as areas in need of new rules.

A joint statement issued after the meeting said China and the EU will establish a joint working group on WTO reform, chaired at the vice-ministerial level.

The two sides also discussed seeking the speedy conclusion of a comprehensive investment agreement. Though many hurdles remain, according to a senior EU official, Beijing and Brussels touted the progress made since talks on such a deal began in 2013.

In the joint statement, the leaders "reaffirmed their commitment to the continued, full and effective implementation" of the Iran nuclear deal that the U.S. decided to exit in May. They also agreed to "confirm their commitments under the historic 2015 Paris Agreement and step up their cooperation to enhance its implementation," referring to the climate change accord that Trump pulled the U.S. out of last year.

This language is intended partly to signal China's consideration for the EU's positions on these issues. As its trade war with Washington escalates, Beijing seeks to draw Brussels into its camp under the banner of free trade. China has also shown some flexibility on human rights issues toward this end, letting Liu Xia, the widow of dissident Liu Xiaobo, travel to Germany.

But Brussels is wary of fully aligning with Beijing against the Trump administration. At around the same time as the EU filed a complaint with the WTO last month over the U.S. steel and aluminum tariffs, it also began bringing a case against China, alleging violations of the intellectual property rights of European companies.

A report issued last week by the European Union Chamber of Commerce in China criticized state-owned enterprises' domination of Chinese markets and the country's unfair demands for technology transfers. The group pressed Beijing to take further steps to open its markets.

The state of affairs seems to have deterred China from calling openly for the EU to stand together with it against Trump. Li stressed Monday that the intensifying U.S.-China trade friction is purely a bilateral issue and that "ultimately it's up to China and the United States to work things out."

The China-EU summit "is not targeted at any third party, nor will it be affected by any third party," he said.

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