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EU Trade Commissioner Maroš Šefčovič said on Monday that the EU will seek to achieve “tangible” results through dialogue with China by October.
Šefčovič was meeting his Chinese counterpart, Wang Wentao, in Brussels that same day for talks that were due to continue into the evening.
Tensions between Brussels and Beijing have ramped up in recent weeks after China repeatedly threatened to retaliate against EU moves to protect its market from Chinese overcapacity.
“Today’s discussions were intensive, focused, and constructive,” Šefčovič told reporters between rounds of discussions with Wentao. “My objective from the outset has been clear: to begin balancing the trade relationship between the European Union and China.”
The EU is facing a growing trade deficit with China, which across the bloc has reached a record €1 billion a day, and engagement with Beijing has become a top priority for Brussels. EU member states gave the European Commission a mandate at the last EU summit in mid-June to conduct a dialogue with Beijing that would deliver concrete results to rebalance the trade relationship.
Šefčovič added that the Chinese and Europeans would “intensify” their dialogue and that he would travel to Beijing this autumn “to assess the progress”.
“Our teams have a clear mandate and an ambitious timetable to deliver tangible results by October this year,” he said.
Access to the EU market has become an issue for China after the European Commission presented a bill in March favouring made-in-Europe products in public procurement. But EU businesses are also finding it increasingly difficult to access the Chinese market.
German trade minister meets Wentao
In a statement on Monday, Beijing and Brussels also agreed that “increased market access measures and initiatives can contribute to the balancing of the trade relationship”.
Both sides also said they were planning to establish a “joint monitoring mechanism” to monitor trade flows, with Šefčovič explaining that the system would use the same data on both sides.
While in Brussels on Monday, Wentao also met with Germany’s Federal Minister for Economic Affairs, Katherina Reiche, whose ministry said it hoped “to leverage shared interests and mutual benefits”.
“Open markets require a level playing field, reliable supply chains, and balanced trade relations,” it said in a statement.
Figures released last autumn showed a record €87 billion German trade deficit with China. The figure served as a wake-up call for Berlin, which until recently had been reluctant to take a tougher stance in order to preserve access to the Chinese market for its companies.
However, competition with Chinese rivals is fierce, particularly for Germany’s automotive industry, which has announced more than 100,000 job cuts in the coming years.
Europe is walking a tightrope when it comes to defending the EU market. On the one hand, governments want to protect their economies from cheap Chinese imports and various unfair trade practices, such as dumping; on the other hand, they fear Chinese retaliation, as Beijing holds the ability to restrict exports of rare earths, which are essential for the EU’s green technology and defence industries.
To shield the EU market, EU leaders have asked Commission President Ursula von der Leyen to review the EU’s trade defence instruments and consider new ones.
A “diversification mechanism” is in the pipeline to encourage EU businesses to diversify their suppliers. The Commission is also considering a “solidarity mechanism” to help the countries most affected by Chinese competition.