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July 16, 2018

China looks to get cozy with EU in annual talks as Trump tariffs bite

China looks to get cozy with EU in annual talks as Trump tariffs bite
FILE PHOTO: An attendant walks past EU and China flags ahead of the EU-China High-level Economic Dialogue in Beijing

BEIJING (Reuters) - The European Union will open an annual meeting with China on Monday, and will be looking to fend off overtures for an anti-U.S. alliance as China seeks a European counterbalance to U.S. tariffs.

Premier Li Keqiang will host European Council President Donald Tusk and European Commission President Jean-Claude Juncker in Beijing, where the two sides could reinvigorate long-running investment treaty talks with the expected exchange of markets access offers for the first time.

The meeting is expected to produce a modest communique affirming the commitment of both sides to the multilateral trading system. Leaders failed to find sufficient consensus for such a joint statement after meetings in 2016 and 2017.

This year's talks come with the United States and China increasingly mired in a trade dispute with no sign of negotiations on the horizon.

U.S. President Donald Trump has warned he may ultimately impose tariffs on more than $500 billion worth of Chinese goods - nearly the total amount of U.S. imports from China last year.

China has sworn to retaliate at each step.

European envoys say they have sensed a greater urgency from China since last year to find like-minded countries willing to stand up against Trump's "America First" policies.

China's ambassador to the European Union, Zhang Ming, said in a commentary in the ruling Communist Party's official People's Daily newspaper on Sunday that the focus of the meeting would be how China-EU relations could become a "standard of stability" amid the "din of unilateralism and protectionism".

China and Europe are "two major forces of stability and responsibility" that support inclusive globalization, Zhang said.

But the world's largest trading bloc, while sharing Trump's concern over Chinese trade abuses if not his prescription of tariffs, has largely rebuffed efforts by China to pressure it into a strong stance against Trump. [nL8N1U000T]

There is deep scepticism in the EU about China's actual commitment to opening its market further, as well as concern that it seeks to divide the bloc with its economic influence in Eastern Europe.

Nonetheless, European officials suggest that Trump, who has also targeted Europe with tariffs, has created a widow of opportunity to show that EU-China relations can be a bulwark for global trade.

China and the EU are also expected to set up a working group on reforming the World Trade Organization during the talks.

European Commission spokesman Margaritis Schinas said on Friday that discussions with China would focus on "trade and investment, on the commitment to combating climate change and investing in clean energy and on foreign and security issues, including the situation on the Korean peninsula".

Schinas said the two sides' leaders would also talk about their joint commitment to preserving the Iran nuclear deal.

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