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Event report --- Trilateral Relationship in an uncertain world

11 October 2017

On 28 September 2017 the EU-Asia Centre, the Brussels Academy for China and European Studies (BACES) and the Confucius Institute at Vrije Universiteit Brussel (VUB), together with Egmont - Royal Institute for International Relations, Centre Européen de Recherches Internationales et Stratégiques, organized a conference on the future of EU-China-US relations – “Trilateral Relationship in an uncertain world”.

Opening the event, Fraser Cameron, Director of the EU-Asia Centre, said that we were living in very unpredictable times. Who would have thought a year ago that the EU and China would have more in common on climate change and free trade than the US?  Now that Donald Trump had been in office nine months it was timely to to assess what were the prospects for the EU, US and China working together to address some of the major global challenges.

Global Aspects

Isabel Hilton, Editor of ChinaDialogue.Net, discussed prospects for cooperation in climate change. While the US had ceased all participation in the 2015 Paris agreement on climate change there were a number of states in the US which pledged to honour the agreement, most notably California. A number of city-to-city agreements between American and Chinese cities further demonstrated a political will by certain states to take responsibility. Yet US-China cooperation in climate change emerged severely damaged. Hilton said she had doubts as to whether EU-China relations could profit from this development although there were huge possibilities. China claimed to honour international standards but they were not yet there.

Regarding international relations, Prof. Yinghang Shi, director of the Center for American Studies of the Renmin University of China, deplored an overall lack of strategy in the trilateral relationship as could be seen in the case of North Korea. He said that no other actor was prepared to replace the US and that China had used up nearly all its leverage in negotiations. Shi said the only countries which were possibly in a position to partner with China were Germany and France.

Prof. Mario Telo of the Université Libre de Bruxelles said that the size of the upcoming global economic change with political change linked to it, represented a particular challenge to the world. In this situation the divergent evolution of EU-US relations were further enhancing global instability and assigned a special responsibility to the EU. Regarding EU-Chinese relations, Telo said that convergence was not the compelling consequence of growing economic interdependencies. The question was whether China was competitor or supporter of the European integration. On the other side the EU-China partnership was particularly multidimensional and institutionalized and represented an objective factor of international stability. There were a number of similarities like the EU’s and China’s proactive role in their respective troubled neighborhoods (conflict prevention, economic cooperation).

Prof. Weiping Huang, Jean Monnet Chair and Co-Research Director of the Centre of European Studies at Renmin University, pointed out that China became a net investor to the EU since 2013 with a net value of 27.4 billion Euros in 2016. He said that the overall imbalance in the world economy was to result in recession by the end of this decade.

In the discussion questions were raised about the character of a possible global governance infrastructure, the replacement of multilateral dispute settlement procedures in favour of bilateral ones, whether regional bodies like ASEAN were prepared to overcome the concept of sovereignty, the belt and Road Initiative and prospects for regional cooperation.

Security Aspects

The second panel on security aspects was opened by Prof. Yong Deng of the US Navy Academy Annapolis, Maryland USA. Deng said that the EU played a rather limited role in Asia Pacific in terms of security. The EU’s biggest feature was its arms sales in the region yet this was not put to strategic use. Thus the major task for the EU was to emancipate itself from the current complimentary role to the US to a more pro-active, independent actor in security issues.

Prof. Canrong Jin, Associate Dean with School of International Studies at Renmin University of China, said that after a good start US-China relations deteriorated to the extent that today security was the biggest challenge after trade. The US stance over Taiwan marked a strategic change in its foreign policy and was to be taken seriously. Jin thought it worrisome that US and EU were prioritizing domestic issues when global governance was needed.

Prof. Emil Kircher, Jean Monnet Chair in European Political Integration at Essex University, said that a strategic partnership between the EU and China was the aim and that he saw great similarities between the two, e.g. in their respective partnerships with Africa. There was also a lot of potential regarding security issues. The EU had played an important role in bringing about the Iran agreement and was prepared to continue supporting diplomatic endeavours with DPRK.

Prof. Yongjun Guo of China Institutes of Contemporary International Relations (CICIR) said that the EU should play a more active role in the DPRK issue and suggested initiating Seven-Party talks. He said the conflict was to be taken very seriously as an escalation could cause the collapse of the global governance theme.

In the discussion, there was a debate on the paradigm shift in today’s free trade agreements (not just economic agreements but sophisticated 2nd generation agreements including issues of environment and security) as well as the nature of security in today’s world (the duty of the global community, steering away from mere domestic issues, envisioning long-term scenarios in order to achieve political and economic stability and hence security).

Trade Aspects

The third panel on the economic aspect was opened by David Fouquet of the Centre Européen de Recherches Internationales et Strategiques (CERIS). He said that in order to conclude an EU-China FTA it was important to get the preliminaries right. Market access remained  the main issue for the EU, alongside Chinese investments and intellectual property rights. Yet China already had 14 FTAs signed and implemented with countries like Switzerland, Australia and Iceland from which the EU could learn about the right sequencing in successfully negotiating a FTA.

Prof. Chun Ding of Fudan University Shanghai pointed out that the EU remained China’s largest and the US China’s second largest trading partner. In 2016 the EU received 35 billion Euros in Chinese OFDI which was a 77% increase from 2015. Yet due to the slowing growth of the Chinese economy EU’s FDI to China declined in 2016 for the 4th consecutive year. There was friction in matters of trade (with China being the EU’s and US’ major target of anti-dumping and anti-subsidy investigation) and investment (EU: firewall against Chinese bid on advanced technology assets; US: rapid increase in security reviews regarding M&As by CFIUS). Yet US isolationism had not influenced the fundamental interests of the three economies. Ding concluded by saying that this new tendency in US trade policy might even open new opportunities for China and EU to cooperate.

Prof. Gunter Heiduk of Warsaw School of Economics questioned the cooperative character in the EU-Chinese relationship. Interdependencies were asymmetric and economic relations clearly of competitive nature. The ongoing dispute upon China’s market economy status was only one example in the matter. What was needed to overcome this situation was a combination of visionary high diplomacy and legally binding measures on specific fields of trade.

Prof. Hua Xin of Shanghai International Studies University highlighted the imbalance in the development of the European integration process (ECSC 1952, EEC 1958, EFTA 1960) vis-à-vis the much younger East Asian integration process (AFTA 1992, APEC 1993, ECFA 2010). The OBOR Initiative opened a whole new field of options for cooperation within the EU frameworks, e.g. with China integrating OBOR programs with CEF in the fields of digital construction, ICT, railway and water transport.

Dr. Duncan Freeman of the EU-China Research Centre at the College of Europe said that beyond trade in goods many areas of economic interaction remained under-developed, e.g. services. The increasing securitization of investment and trade was a worrisome development and a lot of the Paris agreement depended on economic issues as well. Therefore economic issues were not to be treated in isolation from political matters.