China's Premier Li Keqiang, left, shakes hands with European Council President Donald Tusk during an EU-China summit at the European Council headquarters in Brussels, Tuesday, April 9, 2019. (AP Photo/Francisco Seco)

China, EU agree to strengthen trade relationship

April 09, 2019 - 11:37 am

BRUSSELS (AP) — China and the European Union agreed Tuesday to strengthen their trade relationship, pledging to work toward "substantially improved market access, the elimination of discriminatory requirements and practices affecting foreign investors."

EU Trade Commissioner Cecilia Malmstrom has in the past called out China for "unfair trade practices" that highlight the challenges posed by its state-led economy, such as government subsidies intended to give its companies a competitive advantage.

EU leaders Donald Tusk and Jean-Claude Juncker and Chinese Prime Minister Li Keqiang discussed the issues at their summit before claiming a breakthrough in their trade relationship.

"Negotiations have been difficult but ultimately fruitful," Tusk said." We managed to agree a joint statement which sets the direction for our partnership based on reciprocity."

The stakes at the annual summit were high, with two-way trade between the EU and China worth around 575 billion euros ($648 billion) annually. The EU is China's biggest trading partner, while for the EU, only the United States is bigger.

The leaders also discussed China's policy of forcing foreign companies to turn over intellectual property as a condition for access to its big and growing market — an issue that Washington has also made a centerpiece of its trade dispute with Beijing.

In their closing statement, they said: "Both sides agree that there should not be forced transfer of technology."

The EU in December stepped up a World Trade Organization legal challenge filed in 2018 against China's forced tech transfers, calling it a major issue affecting European companies.

Li strongly denied that Beijing is behind industrial espionage, saying the government has never called on Chinese companies to infringe intellectual property rights or steal trade secrets.

The EU's executive Commission said last month in a strategy report that China was a "systemic rival" which preserves its domestic markets for national champions while placing "onerous requirements" on EU companies doing business there.

Li said after the summit that will change.

"We will not treat EU companies, especially those registered in China, with discriminatory policy, including solely foreign-owned companies in China," he said. "And likewise Chinese companies should not be discriminated against in their operation in the European Union."

The summit comes two weeks after Chinese President Xi Jinping agreed during a visit to Paris to work with European leaders to seek fairer trade rules.

China wants a bigger role in international organizations like the United Nations, the World Trade Organization and the International Monetary Fund.

The summit statement said both sides "reaffirm their joint commitment to co-operate on WTO reform to ensure its continued relevance and allow it to address global trade challenges."

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Kelvin Chan in London contributed to this report.

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