European and Chinese leaders meeting at the 20th EU-China Summit have agreed to seek reforms to the World Trade Organisation.
They appear to be sending a message to the United States by establishing a common front in the protectionist trade wars unleashed by President Trump. The economic powerhouses want to work more closely together to protect investment, boost market access and level the commercial playing field.
“China has made strong pleas to keep markets open and fight protectionism," said EU Trade Commissioner Cecilia Malmström. "This is assuring to the EU and its business community."
"However, I would like these encouraging words to translate into more concrete action from China to further open up investments," she added.
China is the EU's second-largest trading partner after the US. According to the European Commission, €1.5bn worth of goods are traded everyday between China and the EU, with the EU exporting far more than it imports.
While China's investment in the EU have only grown in recent years, data for the last 3 years show that the EU's investments in China have almost halved. Between 2014 and 2017, that figure fell from from US$13bn to US$7bn.
Although the two trading blocs have agreed to work together to reform the World Trade Organisation, China is not yet in a position to replace the US as the EU's foremost trading partner. Many of the US qualms about China are widely shared in Brussels, such as the issue of intellectual property, market access, and production overcapacity.
David Fouquet, Vice President of CERIS, the Brussels-based graduate school, told Euronews: “I think the message from Europe is that it doesn’t want to chose one or the other: it can still have beneficial relationships with the US and have beneficial relations with China."
For China, the White House's hardline on the EU is an opportunity. An unintended consequence of the 'America First' principle may be the creation of a trading partnership between China and the EU that puts America last.