Exclusive: EU says Chinese FTA possible, but wants market opening

Tue May 21, 2013 3:47pm EDT
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By Ethan Bilby

BRUSSELS (Reuters) - The European Union is willing to deepen trade ties with China but wants to see concessions from Beijing first, documents seen by Reuters on Tuesday showed.

At the same time as EU regulators are ramping up trade pressure on Beijing by threatening duties on solar panels and telecoms equipment, Brussels is dangling the carrot of trade agreements before the Chinese.

The European Commission is expected to adopt a mandate for negotiating an investment agreement with Beijing this month, but documents seen by Reuters show that a much more ambitious trade agreement could be considered afterwards if China plays ball.

A free trade agreement (FTA) could be looked at in future if China can "address the root causes for current market access obstacles and competition concerns", a draft document written by the EU's diplomatic service said.

The strategy document is an EU response to a proposal Beijing made before last year's EU-China summit, to deepen ties between the two powers in numerous areas. This draft agenda could then be agreed at this year's meeting between top leaders from China and Europe, expected in the autumn.

"Concluding an ambitious investment agreement as set out above would send a strong signal of this readiness and ability to deepen our relationship in an effective manner," it said.

The EU's bilateral investment pact with China, proposed last autumn, would cement EU rules giving Chinese markets open access, while seeking to open Chinese markets for EU businesses. A full FTA would go much deeper.


The European flag flies outside of the La Canada shopping centre in Marbella, southern Spain January 23, 2013. REUTERS/Jon Nazca