EU to join Trump in criticising China's role in global trade

European Union (EU) flags outside the EU Commission headquarters in Brussels, Belgium, on June 20, 2018. PHOTO: REUTERS

GENEVA (BLOOMBERG) - US President Donald Trump's assault on China's trade policies will garner several high-profile advocates on Wednesday, as some of the world's largest commercial regions will meet in Geneva to thresh out the ramifications of Beijing's entrance into the World Trade Organisation (WTO) 17 years ago.

Chinese representatives will say things are going well and that the nation is taking steps to open up its vast economy, according to people familiar with their stance. The US, the European Union, Japan and others will disagree and are expected to criticise China's failure to embrace market-based principles and reform its intellectual property and subsidy regimes, said the people, who asked not to be named because the meeting hasn't happened yet.

The gathering, which starts on Wednesday and finishes on July 13, comes amid a worldwide escalation in trade tensions, with Trump hitting China with tariffs on US$34 billion of its products and regions including the European Union, India and Switzerland starting complaints at the WTO against the two superpowers.

In Geneva, the organisation's members will review China's trade policies and assess its performance in upholding multilateral rules.

The Trump administration previously said it "erred" in supporting China's membership of the WTO because it has "proven to be ineffective in securing China's embrace of an open, market-oriented trade regime," according to a US Trade Representative report released in January.

The US delegation will be represented by Acting Assistant USTR for China Affairs Terry McCartin and US Permanent Representative to the WTO Dennis Shea.

WTO Commitments China will reiterate details from a recent government paper, defending the country's efforts to integrate itself into the global trading system, the people said.

China "comprehensively fulfilled its commitments to the WTO, substantially opened its market to the world, and delivered mutually beneficial and win-win outcomes on a wider scale," according to the June 28 report.

China "firmly observes and upholds the WTO rules, and supports the multilateral trading system that is open, transparent, inclusive and non-discriminatory," according to the white paper.

The US and others will press China to address its role in creating the overcapacity in steel and aluminum markets that has depressed global prices and shuttered mills across the globe. Trump has embraced a hard-line approach to China's overcapacity problems and launched 25 per cent tariffs on steel products that the administration said is necessary to defend America's national-security interests.

Trump's moves have also pushed the EU to impose provisional safeguard restrictions on steel imports in order to help curb cheap foreign steel from entering the European market.

IP Theft WTO members are also expected to criticize Chinese technology transfer policies that they say are discriminatory and result in the theft of intellectual property and technology secrets. The Trump administration escalated its fight on June 6 when it imposed tariffs on US$34 billion worth of Chinese goods and threatened duties on as much as US$500 billion worth of products.

In addition, both the US and the EU have filed WTO dispute complaints that allege various Chinese laws and regulations violate the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights.

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