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European Union unveils new trade policy, warns of measures to blunt ‘negative spillovers’ from China
- The regional bloc unveils what it calls a new, more assertive foreign trade policy that signals greater cooperation with Washington
- But EU data shows that China overtook the US as the regional grouping’s biggest trading partner last year
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The European Union unveiled on Thursday what it called a new, more assertive foreign trade policy that signals greater cooperation with Washington and warns of unspecified measures it reserves the right to take against China to blunt “negative spillovers” from the approach Beijing takes to trade and investment.
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The regional bloc announced its “open strategic autonomy” as a way to cope with challenges including climate change, “greater recourse to unilateralism”, and the economic consequences of the Covid-19 pandemic. It also made reform of the World Trade Organization (WTO) and stronger partnerships in Asia and Latin America key priorities.
The emergence of China as an economic powerhouse is second among five developments that prompted the EU to announce its new policy, just behind globalisation, in the EU document.
The move comes amid a flurry of high-level talks with the administration of US President Joe Biden, which itself has vowed to reverse the policies of his immediate predecessor, Donald Trump, who frayed the transatlantic relationship with punitive tariffs on EU goods and harsh rhetoric against European countries. A coordinated approach to China has been high on the agendas of these talks.
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“Ensuring that China takes up greater obligations in international trade, and dealing in parallel, with the negative spillovers caused by its state-capitalist economic system will be central to the EU’s efforts to rebalance the bilateral trade relationship,” the EU said in trade policy review, which is billed as “an open, sustainable and assertive trade policy”.
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