THE TTALK QUOTES 

On Global Trade & Investment
Published By:
The Global Business Dialogue, Inc.
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No. 26 of 2019
MONDAY, APRIL 8, 2019

Click HERE for last Wednesday quote from China on Venezuela.     
ABOUT TOMORROW'S CHINA SUMMIT
   
"If China doesn't change its positions, there will not be enough common ground to agree on a declaration."  

Cecilia Malmström
April  7, 2019*   
CONTEXT
Yesterday* in Brussels the EU Commissioner for Trade, Cecilia Malmström, spoke to reporters from the Financial Times about the EU-China Summit tomorrow, April 9.  This will be the 21st such meeting.  European Council  President Donald Tusk and EU Commission President Jean-Claude Juncker will host the event.  The Chinese delegation will be led by the Li Keqiang, Premier of the State Council of the People's Republic of China.  It will not be a very long meeting.  It is scheduled to last for only about four hours, with the concluding press conference set to begin at 4:15 p.m.

With so many issues to cover - everything from climate change to industrial subsidies - it is hard to imagine that the top officials will be able to thrash out a joint declaration if the bureaucracies are not able to do so in advance.  But this is one of those situations where it is foolish to ask speculations to substitute for patience.  By this time tomorrow, there will either be a joint declaration or there won't be.
COMMENT
Tomorrow's summit follows on the heels of President Xi's recent trip to Europe.  On March 26, he wrapped up a six-day visit to Italy, Monaco, and France and participated in a Paris press conference with key European leaders that afternoon.  His counterparts at that very congenial event were President Macron of France, Chancellor Merkel, of Germany, and EU Commission President Jean-Claude Juncker.  Our own discussion of that press conference focused on the remarks of President Macron, and was perhaps remiss in emphasizing only the points of agreement between the EU and China.
 
We did not mention any areas of disagreement or tension, though certainly there are some.  Indeed, it was just days before that press conference, March 22, that Mr. Macron spoke to reporters in Brussels about the EU's relationship with China saying, "The time of European naiveté is over."

A better starting point for a discussion of EU-China relations, perhaps, is the paper prepared by the EU Commission and published on March 12.  The title is  "EU-China - A strategic outlook."  To be sure, it is a balanced paper, with a good deal of emphasis on points of agreement and cooperation between the EU and China.  But it also includes a number of points of divergence and concern.  Here are three of them. 

Overview.  The paragraph below seems quite reasonable and balanced - at least as we read it - but there is a phrase in it that has clearly gotten under China's skin.  The paragraph begins:

China is, simultaneously, in different policy areas, a cooperation partner with whom the EU has closely aligned objectives, a negotiating partner with whom the EU needs to find a balance of interests, an economic competitor in pursuit of technological leadership, and a systemic rival promoting alternative models of governance.  

It is clear from press reports that Chinese officials really don't like China being referred to as "a systemic rival."   Should the day ever come when China believes it has prevailed, that objection will doubtless fall away.

On Trade and Market Opportunities, the Commission wrote:

China has also increasingly become a strategic competitor for the EU while failing to reciprocate market access and maintain a level playing field. ... China preserves its domestic market for its champions, shielding them from competition through selective market opening.

In this section, the EU papers takes special note of the lack of reciprocal market access for financial services.

China's Maritime Claims.  If we return to this EU paper in future entries, and we expect to, we are likely to focus strictly on commercial issues, but it is worth noting that the paper is broader than that.  Here is some of what the Commission had to say on maritime issues:

China's maritime claims in the South China Sea and the refusal to accept the binding arbitration rulings issued under the United Nations Convention on the Law of the Sea affect the international legal order and make it harder to resolve tensions affecting sea lanes of communication vital to the EU's economic interests.  They also stand in contrast to China's demands for representation on Arctic issues.

This issue may not be the EU's highest priority, but we think it a good thing that they included it.  More than any other, it forces the question, does international law have any meaning other than as a decorative veneer for the underlying reality: might makes right?

***

Alas we will not even be a fly on the wall at tomorrow's EU-China Summit, but there will be tea leaves to read from the concluding press conference, and we look forward to those.
SOURCES & LINKS
Looking Ahead to the Summit is a link to the Financial Times article that was the source for today's featured quote.

About the Summit is an EU program outline for tomorrow's event.

A Strategic Outlook takes you to the EU Commission paper quoted in the Comment Section above.

No More Naivete is a Nikkei Asian Review article with this Macron quote regarding the EU and China.

*Note on Dates.  Our impression from the FT article cited above is that the discussion with Commissioner Malmström occurred yesterday, April 7, but we are not entirely confident that that is correct.

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