09 Nov 2020

Can dialogues advance EU-China trade relations?

Weinian Hu / Jacques Pelkmans

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The EU pursues its trade agenda with China through a web of economic and sectoral dialogues. We show that these dialogues do matter for wider EU trade policy. After a brief overview of the architecture, we map the trade-related dialogues and identify seven possible functions of them, giving examples of dialogues on public procurement; reforms of state-owned enterprises (SOEs); forced technology transfer; the protection of intellectual property rights; and sustainable forestry and the timber trade. The assessment seeks to answer four specific questions:

  1. Do dialogues improve market access? Dialogues would seem to have facilitated market access in a variety of ways. The EU has also insisted on reforms in China with a view to easing restrictions that hinder effective market access. For some aspects this seems to have worked, but not for the big issues, for example SOE reforms.
  2. Can the web of dialogues be seen as an ‘unbundled’ free trade agreement (FTA)? The answer is, not really. The trade dialogues do not seem to substitute, even imperfectly, for an FTA.
  3. Can the dialogues stimulate ‘sustainable development’? A recent convergence of EU and Chinese objectives has been extremely helpful for effective bilateral cooperation, on social matters (labour standards and social protection) and the environment & climate. Cooperation on energy, climate strategies and other environmental concerns, following dreadful neglect and indifference in China, are achieving results, such as better (for instance, risk-based) regulation, higher ambitions and more effective enforcement.
  4. Can dialogues reconcile or at least mitigate ‘systemic’ differences? Here, dialogues have not proved very useful in terms of results. From the EU end, addressing systemic differences effectively when the partner country takes pride in enjoying a ‘socialist market economy with Chinese characteristics’ is intrinsically impossible. It is an accomplishment when channels of cooperation are kept open.

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