This was the bilateral summit, but it was part of a trilateral (and global) discussion as well. The United States was the elephant in the room, a factor in China's desire to have a statement, and the third country whose interests are likely to be most affected - both positively and negatively - by the agreements being worked between China and the European Union. We shall keep this brief, in part because we expect to look at EU-China trade from different perspectives in the weeks ahead (Please see
Related Event below).
The EU's strong objections to the Trump Administration's 232 tariffs on steel and aluminum are well known and more than compounded by the threats of more tariffs to come on other products. China, of course, has those tariffs and more to contend with. Against that background, it is hard to read the reference to "unilateralism and protectionism" as anything other than a joint EU-China broadside against the United States.
As for the U.S. providing some of the impetus for yesterday's joint statement, we assume China sees it as strengthening its hand in the current trade talks with the United States.
Industrial Subsidies. As for the elements of the statement, we are not going to try to address all 24. We shall, however, take note of three of them, beginning with the critical commitment on industrial subsidies. It is important, and Mr. Juncker was right to stress it. On the other hand, it is a commitment to improve the rules of the WTO. That is not a quick process, and it is probably a mistake to look for early changes in China's conduct or policies in this area.
Geographical Indications. The EU and China aim to conclude an agreement on GIs this year. These are, essentially, special protections for EU agriculture, and we don't fault the EU for pursuing its own interests in such a critical market. But it is fair to note that extensions of the EU's GI policies tend to come at the expense of U.S. agriculture.
Law of the Sea. The Joint Statement's treatment of this issue is of a different character. We see no reason, for example, why the United States should not welcome this passage:
China, the EU and its Member States are parties to the United Nations Convention on the Law of the Sea and respect the maritime order based on international law and uphold freedoms of navigation and overflight enjoyed by all states in accordance with international law. ... China and the EU call upon all relevant parties ... to refrain from actions likely to increase tensions.
We suspect that, judged by any standards but its own, China is going to have difficulty with that last provision.
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The rhetoric game is a difficult one. In today's world, the EU and China are more comfortable with each other's rhetoric than either of them is with the rhetoric of the United States. Whether that is true of the underlying policies, however, is another matter.
