eu-chinaMany of our commenters are quite hostile to the EU-US trade deal currently being pursued. They argue, among other things, that the regulatory approaches in the US and Europe are too different, and they believe the Trans-Atlantic Trade and Investment Pact (TTIP) will erode environmental, food safety and other standards in the EU.

Not all of our readers are opposed to a trade deal, however. We had a comment from JJ, for example, who says he fully supports TTIP. Indeed, he even suggests that the EU should sign a similar Free Trade Agreement (FTA) with China along the lines of the EU-India or EU-US agreements currently being negotiated.

To get a response to this suggestion, we put JJ’s comment to Joerg Wuttke, President of the European Chamber of Commerce in China. How would he react?

wuttkeWell, Europe and China have already started negotiations on a business investment treaty which covers market access for European companies into China. Business in Europe would rather have the EU take one step at a time; so, first the successful conclusion this year, or at the latest in 2016, of an ambitious business investment treaty before we consider going down the road of an EU-China FTA.

We also put JJ’s comment to Hanns-Guenther Hilpert, Head of the Asia Research Division at the Stiftung Wissenschaft un Politik.

Hilpert_Hanns_GuentherChina has in fact already asked the EU to begin negotiations on a Free Trade Agreement. However, the Commission and most Member States are reluctant about it. So, it’s not a short-term thing, but in the mid-to-long term it could happen.

However, I would say that neither the EU-US nor the EU-India FTAs are good role models… For example, with TTIP, the US and the EU are searching for common grounds to establish trade rules for the 21st century. The EU objectives towards China, however, would be different; it would be about securing the implementation of modern regulation in China, and to confront the challenge of China’s competitiveness in Europe, and also to ensure that manufacturing and services can compete on equal footing in China. So, for me, if there is any role model for an EU-China FTA, it would be rather the EU-South Korea foreign trade agreement…

We also had a comment from Marilina who argued that European companies would struggle to compete with Chinese rivals because labour costs in China are so much lower. We put this to Joerg Wuttke to see how he would respond.

wuttkeYes, of course we cannot compete on labour costs. But, frankly, our products are so different that we have completely different portfolios. We are in upscale chemistry, we are in cars, complex machinery and so forth, whereas China is still a low-tech economy which derives its added-value from a lot of cheap labour. So, I would say the overlap of products is very, very small.

Besides which, we benefit greatly from these cheap labour costs, which gives us all these textiles, shoes and electronics that we can buy in European shops much cheaper and then spend our other money on European items. So, in the end, it’s win-win at this stage. Certainly there are some losers that are companies facing Chinese competition, but the fact is that we should stay ahead of the curve and be technology driven, and then we shouldn’t worry about competition.

Finally, we put Marilina’s comment to Iana Dreyer, Founder and Editor of Borderlex.eu, an information website on EU trade Policy. What would she say?

dreyerI think this is changing. Labour costs in China have increased dramatically over recent years, and China now has quite a substantial middle class. So, the economic relationship that is shaping EU-China trade and investment is really changing. The cheap labour dimension of that relationship is now less important, and that kind of production is shifting to South and South-East Asia, to countries like Vietnam, Pakistan and Bangladesh. In the coming years, China will be more about investing in services in infrastructure, finance and business – precisely the kind of activities that will sustain a more urban and middle class China. I think the idea that China’s economic growth is still based on very cheap labour is still true to a certain extent, but it’s less and less the central issue in its relationship with the EU.

Should the EU sign a Free Trade Agreement with China? Let us know your thoughts and comments in the form below, and we’ll take them to policy-makers and experts for their reactions.



141 comments Post a commentcomment

What do YOU think?

  1. avatar
    Teresa Guerreiro

    If the initial terms of the contract were equal, like working conditions, salaries and social welfare among others, we could think about it. Otherwise it’s impossible and a terribly bad business for European peoples.

    • avatar
      Kevin

      This is what we think in the UK when competing for jobs with eastern Europe.
      That aside the green lobby in Europe makes our manufacturing costs very high compared to countries like China. As you say though its not a level playing field so No . FTA with China

    • avatar
      CyberMonk

      @ Kevin. Sometimes i think EU should just kick UK out just to prove a point and rub your smug noses on the reality of the fact that singularity is obsolete concept

    • avatar
      JaviZ

      @CyberMonk. the donkey kicking. Ha ha.
      Have you heard of free trade zone?? Better learn what made Singapore what it is.
      UK free trade zone is what Merkel and EU fears.

  2. avatar
    Malik Sajjad

    No
    If European make free trade agreement with China
    This will be demage European countries economic

  3. avatar
    Rui Jamp

    Are you joking…? Want to finish the Europeans for good? If you do that i go to another continent to live

  4. avatar
    George Titkov

    I think it must be made clear that the problem with the EU-US trade deal lies in the opaque manner the negotiations are being conducted behind the curtains, the exclusion of the public from the process and the ever growing feeling that the USA is pushing onto the EU a deal which is not exactly mutually beneficial. An agreement which will allow US corporations to sue EU countries in specially created for the purpose trade tribunals for losses caused by changes in the national legislation of the EU countries, for example. This is what causes hostility, not the fact that a trade agreement is proposed. Same goes for China. The question is what are the details of the agreement.

  5. avatar
    Alex Tselentis

    Europe must choose to do business with a broke bankrupt war hungry US .. Or do business with the worlds richest biggest economy, its a no brainer .. US has created/fuesling a WAR in Ukraine which has killed thousands, just to keep a wedge devide between Europe and its natural neighbour Russia, why trade with people who kill your own ??

    • avatar
      CyberMonk

      U should not break bread with a demented homicidal sociopath just because he is your neighbour. the war in Ukraine is a Putin’s mid life crisis and the desperate attempt of an old nation to cling to its former ”glory”

  6. avatar
    Ingemar Grahn

    well as win the ttip i would only support it under certain contition. Don’t interpret it false i’m fore and like FTA in general and in must tho be combined with visa and preferable also passport free travels.

    But they need first as US also should do respect human rights and make at least the same ambitious goal in environmental as EU have.

    That will also include stop surveillance of stasi like or beyond type like that on US is doing is a no go for any FTA agreement including TTIP.
    Also lessen the power of money by limiting the possible lobbing.

    ALL FTA should and must be sign of by organization like Amnesty in that way it will also improve for the humans on both side and not just us. Also no go for chemicals in any FTA county that is banned in the EU.

  7. avatar
    Von Murray

    I thought that the eu was primarily set up to prevent another war in Europe, secondly to allow free trade amongst members, when dud China join ???

  8. avatar
    Vicente Silva Tavares

    No! Unless they put the same customs tariffs to European goods as we actually charge to their goods. We charge between 3 and 6% (and some goods are simply exempt) and the Chinese start charging on 90%. How can European leaders be so blind? China, an undemocratic country is destroying the jobs in Europe.

  9. avatar
    Leonard Selaj

    The broader view. If there’s a free trade EU is terribly less competitive because of terribly cheap chinese labour. The market than will try to adjust itself so if you want to be competitive u need slaves. Are europians ready for this? We will return centuries back and people will start living like commons in china. Who wants that?

  10. avatar
    Cristian Titus Raicu

    No. But no one will listen to the views of ordinary people. The political “elected” people are shitting about that.

  11. avatar
    James Beckles

    A free trade agreement between the EU and China would be mutually beneficial. China’s market would be opened to European goods and services and vice versa.

    We should learn the lessons already emerging from the Transatlantic Trade and Investment [TTIP] negotiations and ensure public services are not at risk of commercial takeover.

    Chinese goods are already bought and sold throughout the EU. China’s success is that it is a cost effective location to manufacture and export goods back to western markets. This has led to trade deficits with many nations including the United States and several EU nations who view China’s growing economic power as a cause of concern.

    By negotiating and setting a binding free trade agreement the EU will have access to a country with a population over a billion, all potential consumers. This creates jobs and new opportunities on both sides.

    China is already a member of the World Trade Organisation [WTO] and an emerging force in international markets. A free trade agreement would make good business sense.

    • avatar
      ancylostomiasis

      The Chinese terms joining the WTO is mainly with goods trade, which by the way they had a bizzare record on fulfilling those. The western competitiveness comes mainly from service trade which is strictly regulated even in China internally.

  12. avatar
    Luli Nuredini

    There is a big economic difference. IT WILL NOT BE BENEFICIAL FOR THE EUROPEAN INDUSTRY.

  13. avatar
    Américo Magalhães

    In fact Europe has an almost free trade for the imported products from China. But China do not. The european products pay high tax to sell in China

  14. avatar
    La Fed Ham

    China is an environmental tyrant with no sense of respect towards resource management. Why would you support their unethical industries at the cost of your own?

    • avatar
      Chiara Campanelli

      I agree. They don’t respect most of the fundamental labour rights.
      Furthermore, The quality of China’s products is really bad. In Europe we have refine the elements which compound single products, we don’t use detimentral plastic or varnish. We have high-standard-quality levels, and China doesn’t respect anyone of them.

  15. avatar
    Santens Frederik

    if China starts to pay his workers like they should i would agree how it’s now i would rather stop doing busines with governements who don’t pay min salary of 8 euro / houre !!

  16. avatar
    Karel Martel

    The idea of China joining the EU is ludicrous. Obviously we should pursue trade with China. But the conclusion of the Transatlantic free Trade Agreement should be a priority.

  17. avatar
    Laurinda Seabra

    @Karel – its clear that you have no idea what it will mean for Europe to sign this agreement as its currently stands.

  18. avatar
    ironworker

    Can anyone (especially free marketeers selfish randians) guarantee that a free trade agreement is beneficial JOBWISE for all europeans ? I doubt. I would agree though if by “magic” trade balance will remain in reasonable and controllable margins. European goods (exports) can bypass Russia and go straight to a much larger market anytime.

  19. avatar
    Jaume Roqueta

    No please! it is better to mantain China as a place where our companies can produce for very low prices for our daily satisfaction… we should instead increase the tensions between both countries in orther chinesse people could continue to be poor and slaves of us!

  20. avatar
    Olivia Sena

    China is mercantile! Have u lost your mind? NO Plus they will destroy irremediable the internal production cause we can never produce cheaper than China as it uses slavery. Traditional slavery. Plus morally, China does slavery (adults, children)!!!!!!!!!! We need to stimulate internal production. Less ppl enslaved for us in China, more jobs internally, internal consumption grows!

  21. avatar
    Pedro Redondeiro

    Nope, not yet. It is too soon, china still has a long way to go to to be a reliable trade partner for Europe! I am not saying it may not happen somewhere in the future, but for now, it is too soon!

  22. avatar
    EU reform- proactive

    Kindly fill in the conditions & price first, than ask again!

    The citizen’s chequebook has been withdrawn from the rabid EC & JCJuncker’s team! No more blank cheques available= sorry!

    Future generations ‘Sesame’ will only respond to “transparency, accountability & a winning deal in favor of the issuer!

  23. avatar
    rainer Kordes

    never . neither with the US nor China. It is a short cut of large corporations to take possession. not to speak of concerns about democratic legal processes, environmental concerned and food safety.
    large corporations would use their resources to push their interests through, whereas SME cannot even afford to defend themselves, as the legal costs would be high .and as long as China government prefers local companies at all levels and cost, i don’t see any base to even discuss .

  24. avatar
    Thomas Kruemmer

    I couldn’t possibly put it more diplomatically than Joerg Wuttke did. He is spot-on right.

  25. avatar
    Yvetta

    Only if it is a good deal for the EU and its citizens, which our beloved politicians get paid for enough to work out for us.

  26. avatar
    Francesco

    Well, depends what this really means. Our Company produces high quality food in Italy and we sell in the Chinese market, paying up to 50% of taxes and custom duties. But on the top of these there is the big complexity of understanding the Chinese Food Inspection Authority rules (CIQ) that are not very clear, subject to frequent changes and personal interpretation. Only if China will make also these rules more transparent and stable, we could have a Free Trade Zone.

  27. avatar
    catherine benning

    What we EU citizens don’t see or know about is the secret deals and what they really are contemplating for themselves at the cost of us all.

    My intuition tells me this ‘Free Trade’ would not be in the best interests of the European citizen, as if it was, they would be telling us about it at the top of their voices. Are the Chinese going to be open and happy at the idea of us reclaiming our lost workers employment and thereby removing the ability for full employment from them? I don’t think so. At the back of this charade are these you will see in this link. It is part two of the ‘Super Rich and Us’ documentary aired on BBC2 last night.

    http://www.bbc.co.uk/iplayer/episode/b04yn2yq/the-superrich-and-us-episode-2

    As I wrote on another thread, we have been mugged by our politicians. And until we rid ourselves of them who are at this game, they will continue to do it. As, quite rightly, they feel if we are willing to put up with it, then we are colluding in our own demise.

    If a computer can trade a trillion dollars in a day, that is fraud against us all. Because every time it goes off the rails in the trading room, they ask us to bail them out. And now they are zooming in from China. Unless we had a fly on the wall inside knowledge of these rooms of discussion, I would vote against any deal these dodgy politicians are making. Their concern is only for themselves.

  28. avatar
    catherine benning

    I dug this up after thinking this wasn’t all that could be said in this thread.

    http://ec.europa.eu/trade/policy/countries-and-regions/countries/china/

    If, as the first line they write is, they want to be sure China trades fairly, then they know this is not what the Chinese are about. Why would anyone go into a deal with a group of people they feel are going to be bent? That is the equivalent of entering a contract with a known confidence trickster. You know you are going to get done, but still gamble. And whose money is it these buffoons will be gambling with. Would it be the European tax payers?

  29. avatar
    ancylostomiasis

    Some crazy ideas there! The Chinese goverment is rich with capital, alluring surely, but everthing comes with a price. Struck a freel trade deal with a country where ‘free’ is to its most extent non-existent will cause some consequences indeed. Plus, if the deal doesn’t include terms on trades of service it’s pointless, if it does, it will bring recoil from the authoritarian Chinese politics and cause major defaults later on.

    It’s not worth to deal with the devil.

  30. avatar
    Franck Legon

    with Russian Federation first because it’s a wide market and have plenty of ressources, everything we need, then later with other eurasian countries like India and China, but no trade agreement should be “free”, it’s always a conditional, that fixes the rules for the trades, nothing should be wide open at any human or economic cost .

  31. avatar
    Bruno Verlinden

    No, ideally you have open trade with economies that are at a same level of cost. So us, europe, japan, etc.. Those countries should create a shared economic zone and manage exchanges with outside countries.

  32. avatar
    Bita Nahal Peace

    Off course we all should! We should all trade with eachother and support and exchange and celebrate the cultural and financial gains we receive and give. This is the most positives aspect of liberalism and free trades which opens peaceful and prosperous bridges from one corner of the world to the other. China’s prosperity is everyones prospierity. Western prosperity is everyone’s prosperity. Russia’s prosperity is every ones prosperity, same goes to iran and rest of the world.

  33. avatar
    Alex Tselentis

    EU if it had ANY BRAINS would dump their Imperialist war mongering thieving American “partners” who have done nothing but ignite a war in Ukraine and exported a never ending financial crisis, and join Russia/China  (BRICS) its a no brainer.

  34. avatar
    Stella Kontogianni

    Do we have any alternatives? China is huge, Europe is much smaller and devided in many smaller countries with severe competition beteen them. Each country in Europe is like village in China. For them Europe is an old weak aunt that can be easily convinced to sign a will leaving all its fortune to them

  35. avatar
    Georgi Tashev

    At the moment – China import in Bulgaria a lot. And kill the business in here. After all – no taxes as international company…. Because of the European laws, and the Bulgarians become more poor, out of work….. Because Europe wants it.

  36. avatar
    George Titkov

    Europe should sign Free Trade agreements with all interested parties, and that includes USA and China as well, on one condition: European interests must come first, European citizens’ and companies’ interests must be fully protected and must come first, not last. After all, when we go to China or the USA, we follow their rules and obey their laws. They should not dictate to us the conditions of how we do business in our own Union and countries.

  37. avatar
    Sylvain Duret

    No, China refuse to respect trade laws. It’s a trap, like the free trade accord with Usa. Eu should harmonize her own trade in europe first, become a federal power and then we’ll could make fair business with other superpower countries.

  38. avatar
    Joseph Bartolo

    Yes by all means they are the future and the future i not only Europe but the Whole World of Nations :) <3

  39. avatar
    Toni Muñiz

    NO, what we should be doing is controlling and taxing imports from China. We want jobs in Europe? Stop allowing trade from China.

  40. avatar
    nando

    NO! Unless you can tell us up front what the terms would be…

  41. avatar
    Anibal Matos

    Acordo com países onde a economia se fundamenta na escravatura? Será que os valores da EUROPA estão tão por baixo ? A PESSOA já não conta ? Só o Lucro ? A simples proposição do tema é Diabólica!

  42. avatar
    Eduardo Castro

    Era o descalabro se assinassem esse acordo. O maior problema do ocidente é a concorrência desleal que nos obrigaram a ter com a china. Como podem as empresas europeias concorrer com quem pratica Dumping, não tem sindicatos, é uma ditadura. Não há reciprocidade nos negócios. Claro que o lobby dos grandes grupos importadores lutará por isso. Se tal acontecer, o pouco trabalho que temos, vai para a china e por consequência o dinheiro. Por isso eles andam a comprar tudo.

  43. avatar
    Kossack Nikko

    the EU does NOT exists it does not represent any one it is not a state or a federation they definitely do not represent me

  44. avatar
    Eva Benko Zoltan

    What about asking us about austerity that is known to be criminal for the people and they keep imposing it on us?

  45. avatar
    Irena Leibovici

    For sure not! They are never going to be reliable partners, they will never care about the quality of life and health of their European partners. Corruption is in billions in their country and they have no real consideration for the modern European civilization. They actually want to place as much as possible Chinese people in Europe …

  46. avatar
    Richardfrance2568

    Yes, we must develop a positive financial perspective. We can see the fruits of over protecting our markets. While in the short run, there will be great challenge, we must avoid war. Great Leadership will be the answer for Phase I. 2015 thru to 2020, being volatile, Then the potential bull market, space-time endeavors 2035-2050 greater A I. In Robotics. CASPR 2035-2099 Phase III. One’s aptitude shall determine one’s altitude of our World. We shall determine the direction for World Peace.
    A paradox between Peace & Wealth or Greed for World Power Domination.
    Respectfully yours.

  47. avatar
    jthk

    Having been under the auspices of the US, Europe appears to have lost its independent thinking and courage to walk a new road. The British has been reluctant to leave EU after 3 years of the referendum and it is still not going anywhere and does not know what to do with the Brexit. EU has been reluctant to sign a FTA with China, the most robust and second largest economy. However, it has signed a FTA with Japan, an economy which has been undergoing stagnation for twenty years. EU leaders appear to very confused and acting irrationally. For example, Airbus has received a big contract of 300 planes from China, which has definitely benefited the French economy. Macron had declined US invitation of a military drill in the Asia Pacific but accepted the invitation to send a warship to join the PLA navy anniversary. However, just before the anniversary, Macron has sent a warship to the Taiwan Strait, which has led to China’s withdrawal of the invitation. Macron has infuriated both Trump and Xi Jingping. What Macron actually wants? Apparently, the rise of China and relative decline of the US has led to such confusion and reluctant to take any action. If political leaders are unable to react, how about the people? This would unavoidable lead to social unrest.

    • avatar
      Thomas Kruemmer

      France does not represent the EU, the EU Commission does. It is quite simple: On the Ease of Doing Business Index Japan is on position 30, China is on position 100. EU and Japan economic systems are compatible, along with other compatibilities, which China simply does not have. Since the 3rd Plenum of the 18th Central Committee the ruling Communist Party of China has made glas-clear, that its systemic incompatibility with its main export markets will increase, not decrease, because of ideological principle. Have you ever asked yourself, why the EU pointedly does not negotiate a free trade agreement with China, but only an investment agreement? It is in recognition of the fact, that China does not want to become compatible, as China prefers to stick to an overcome ideology that at its core has an economic system that is incompatible with the rest of the world. So, nothing can be done.

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