EU urges big powers to prevent trade ‘conflict and chaos’

Chinese Premier Li Keqiang will host European Council president Donald Tusk and European Commission president Jean-Claude Juncker (right) in Beijing to produce a modest communique that affirms both sides to the multilateral trading system. PHOTOS: AFP, REUTERS

BEIJING (AFP, REUTERS) - The European Union on Monday (July 16) called on the United States, China and Russia to work together to avoid trade "conflict and chaos" to prevent it spiralling into violent confrontation.

"It is the common duty of Europe and China, but also America and Russia, not to destroy (the global trade order) but to improve it, not to start trade wars which turned into hot conflicts so often in our history," EU Council President Donald Tusk said in Beijing.

"There is still time to prevent conflict and chaos." Tusk spoke after meeting with Chinese Premier Li Keqiang as part of an annual EU-China summit that opened against the backdrop of the growing China-US economic confrontation and wider global trade discord.

The EU - the world's biggest single market with 28 countries and 500 million people - is trying to buttress alliances in the face of the protectionism unleashed by US President Donald Trump's "America First" administration.

The meeting between Chinese and European officials in Beijing, which also included European Commission head Jean-Claude Juncker, comes as Trump prepared to hold talks in Helsinki with Russian leader Vladimir Putin.

The world needed trade reform, rather than confrontation, Tusk said.

"This is why I am calling on our Chinese hosts, but also on Presidents Trump and Putin, to jointly start this process from a thorough reform of the WTO."

"Today we are facing a dilemma, whether to play a tough game, such as tariff wars and conflict in places like Ukraine and Syria, or to look for common solutions based on fair rules," Tusk said.

The meeting is expected to produce a modest communique affirming the commitment of both sides to the multilateral trading system. Leaders failed to find sufficient consensus for such a joint statement after meetings in 2016 and 2017.

This year's talks come with the United States and China increasingly mired in a trade dispute, with no sign of negotiations on the horizon.

US President Donald Trump has warned he may ultimately impose tariffs on more than US$500 billion (S$683 billion) worth of Chinese goods - nearly the total amount of US imports from China last year.

China has sworn to retaliate at each step.

European envoys say they have sensed a greater urgency from China since last year to find like-minded countries willing to stand up against Trump's America First policies.

China's ambassador to the European Union, Zhang Ming, said in a commentary in the ruling Communist Party's official People's Daily newspaper on Sunday that the focus of the meeting would be how China-EU relations could become a "standard of stability" amid the "din of unilateralism and protectionism".

China and Europe are "two major forces of stability and responsibility" that support inclusive globalisation, Zhang said.

But the world's largest trading bloc, while sharing Trump's concern over Chinese trade abuses if not his prescription of tariffs, has largely rebuffed efforts by China to pressure it into a strong stance against Trump.

There is deep scepticism in the EU about China's actual commitment to opening its market further, as well as concern that it seeks to divide the bloc with its economic influence in Eastern Europe.

Nonetheless, European officials suggest that Trump, who has also targeted Europe with tariffs, has created a window of opportunity to show that EU-China relations can be a bulwark for global trade.

During the talks, China and the EU are also expected to set up a working group on reforming the World Trade Organisation.

European Commission spokesman Margaritis Schinas said on Friday that discussions with China would focus on trade and investment, on the commitment to combating climate change and investing in clean energy and on foreign and security issues, including the situation on the Korean peninsula.

Schinas said the two sides' leaders would also talk about their joint commitment to preserving the Iran nuclear deal.

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