Xi Visits Brussels, may Join WTO TiSA
Negotiations
The EU and China agreed on
Monday to consider the possibility of a bilateral trade pact, should their
current negotiations for an investment deal prove fruitful. The announcement
came as part of Chinese President Xi Jinping’s
high-profile visit to Brussels, which also saw the EU publicly support
Beijing’s bid for joining talks on a plurilateral
deal in services trade.
The summit showed a marked
change in tone from the bilateral trade tensions seen in recent years, which
saw the two sides spar heatedly over topics ranging from support of their
renewable energy sectors to trade in wine and telecommunications products.
The trip also marked Xi’s
first visit to Brussels since assuming his country’s top leadership position a
year ago, and also the first time a leader from the Asian economic powerhouse
has visited the EU institutions since diplomatic relations were established in
1975.
EU, China: investment talks
could open FTA door
The EU and China made
headlines last year when they agreed to negotiate a sweeping bilateral
investment pact, and have held two rounds of talks so far, with the latest one
occurring the week before the high-level summit.
The level of foreign
investment between the two sides is famously low, particularly when compared to
their trading relationship. According to European Commission data, China
accounts for 2-3 percent of EU investments abroad,
while Chinese investments in the 28-country bloc are even lower.
While the investment talks
could in themselves yield substantial gains to both
economies, trade observers have also noted the potential that such a pact might
have in paving the way for a bilateral free trade agreement (FTA) in the
long-term.
Trade flows between the two
sides already surpass over €1 billion daily, making the EU China’s biggest
trading partner. China, meanwhile, is Europe’s second-largest trading partner
after the US.
The push by Xi for an EU-China
deal - which could have a market of 2 billion consumers - comes at a time when
so-called mega-regional trade pacts have become increasingly commonplace. China
is not currently involved in either the 12-country Trans-Pacific Partnership
talks, nor the US-EU Transatlantic Trade and Investment Partnership, and many analysts
have questioned whether such initiatives are an effort by advanced economies to
partly counter Beijing’s growing economic weight.
EU backs China entry into TiSA talks
In another victory for China,
Brussels also declared on Monday that it will be backing Beijing’s bid to join
the Trade in Services Agreement (TiSA), a plurilateral negotiation among a subset of the WTO’s
membership that aims to liberalise services trade.
China declared its interest in
the services talks late last year, despite having earlier been sceptical of
such plurilateral initiatives. However, some current TiSA participants have reportedly questioned whether China
indeed shares their level of ambition, particularly given the Asian economy’s
role in last year’s breakdown of a separate set of negotiations on expanding
the WTO Information Technology Agreement.