Stanley's blog

The op-ed of John Fox and François Godement in the Financial Times of 19 May urges Europe to stop “pandering to China” but offers no effective advice as what then to do.

They argue that “Europe’s engagement-at-all-costs approach over the last two decades has given China access to all the economic and other benefits of cooperation with Europe while getting very little in return”.

This is too narrow a viewpoint to be taken. China’s economic success has lifted 300 million people out of poverty (a central EU development aim), underpinned stability in a dangerous region, contributed to reducing European consumer costs, increased the competitiveness of some of our industrial sectors and enabled many of our companies to make good profits in China. Whatever the concerns about low cost imports, it must be remembered that this is not an EU-China problem but an EU-Asia one.

China is not being fair over market access, particularly in services, but what “incentives and threats” will be effective “to strike bargains”? The authors offer no answers.

I do agree that China should be granted market economy status in return for greater access to the Chinese market, but this must be a precise and deliverable set of commitments. But what does the EU do if MES is granted and the Chinese commitments are not implemented?

The EU27 will not agree to lift the arms embargo in return for China supporting stronger sanctions against Iran. The US will in any case not agree and the threat to restrict technology transfer to Europe is a real one. The embargo is, of course, merely symbolic and would be accompanied by a tougher EU arms export code than the existing one.

Of course the EU should have a single policy on the Dalai Lama but the egotism of Member State leaders and the competition between them prevents a single external policy and voice emerging o this or any other issue.

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  1. What are the priorities of the 27 member countries? If avoiding sovereign bankruptcy is #1, then the EU cannot ignore the bloc’s unsustainable trade imbalances with the rest of the world, including China. The other values mentioned above have little economic benefit for Europe in the short term.

    For example it is reported that the trade deficit with China in 2008 was €170 billion. Exports from the EU’s 27 member states to China rose to €78 billion while imports from China rose to €248 billion. All EU countries have a trade deficit with China, with the worst being the Netherlands (€41 billion), the UK (€33 billion) and Italy (€24 billion).

    However global trade is the responsibility of the EU. A few years ago some farm ministers complained that the EU trade commissioner was making too many concessions at the Doha trade round at their countries’ expense.

    The problem may be more the simplicity of Doha than the EU.

    [WORDPRESS HASHCASH] The poster sent us ‘1055386704 which is not a hashcash value.

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