June 2, 2017 / 5:37 AM / in 6 months

EU, China trade spat blocks climate statement

BRUSSELS (Reuters) - The European Union and China warned U.S. President Donald Trump on Friday he was making a major error by withdrawing from the Paris climate pact, but the pair failed to agree a formal climate statement because of divisions over trade.

Chinese Premier Li Keqiang and Foreign Minister Wang Yi (L) attend the EU-China Summit in Brussels, Belgium June 2, 2017. REUTERS/Francois Lenoir

Speaking alongside Chinese Premier Li Keqiang, the EU’s Donald Tusk said efforts to reduce pollution and combat rising sea levels would now continue without the United States. But a spat on trade and steel production underscored the differences in a sometimes difficult EU-China relationship.

“We are convinced that yesterday’s decision by the United States to leave the Paris agreement is a big mistake,” Tusk, who chairs EU summits as the head of the European Council, told a news conference with Li and the EU’s chief executive Jean-Claude Juncker.

“The fight against climate change, and all the research, innovation and technological progress it will bring, will continue, with or without the U.S.,” Tusk said.

In their meeting, the three leaders committed to cutting back on fossil fuels, developing more green technology and helping raise funds to help poorer countries cut their emissions, but a dispute about trade ties scuppered plans for a formal joint statement.

Despite what officials described as a warm meeting, China and the European Union could not agree on a broader final communique meant to focus on a range of other issues discussed at the talks, including a commitment to free trade and measures needed to reduce a global steel glut.

The leaders’ news conference was delayed for three hours as they sought to find agreement.

According to one person present at the summit, China’s insistence on a reference that the European Union will eventually recognize China as an economy driven by the market, not the state, blocked the final 60-point statement.

That also meant there could be no agreement on a formal pledge to work together to reduce global steel production.

China’s annual steel output is almost double the EU’s total production and Western governments say Chinese steel exports have caused a global steel crisis.

That theme was an undercurrent of the day-long meeting. Before the formal EU-China summit got underway, Juncker referred at a business conference with Li to a World Bank report placing China 78th out of 190 countries in terms of the ease of doing business.

“A big economic powerhouse needs to be higher than mid-table,” he said, adding that a planned EU-Chinese investment treaty needed to be completed to ensure reciprocal relations.

France, Germany and Italy have mooted the idea of allowing the EU to block Chinese investment in Europe, partly because European companies are denied similar access in China and because of risks of China acquiring prized European technology.

In reply, Li said China was working hard to promote a trade balance, with Chinese tourism to Europe now far greater than EU tourism in China. Foreign investment opportunities, he said, were far different from when China first opened up.

“I do hope you can put things into context. We find the problems, but we are working on them ... Our ranking is getting better,” he said.

“NO REVERSE GEAR” ON CLIMATE

Trump’s announcement on Thursday that he would take the United States out of the Paris accord, saying the agreement would undermine the U.S. economy and cost jobs, drew anger and condemnation from world leaders and heads of industry.

European Climate Commissioner Miguel Arias Canete told reporters in Brussels he deeply regretted the U.S. pullout from the pact to fight the dangers of global warming, which was signed by more than 190 countries, and said it could not be renegotiated as Trump has suggested [B5N1G8011].

“The agreement is fit for purpose. The Paris agreement is here to stay and the 29 articles of the Paris agreement are not to be renegotiated,” he said after meeting his Chinese counterpart.

Juncker told the business conference on Friday that China and the EU recognized the need for international solutions and this was nowhere more important than full implementation of the Paris agreement.

“There is no reverse gear to energy transition. There is no backsliding on the Paris agreement,” Juncker said.

China overtook the United States as the world’s biggest emitter of greenhouse gases in 2007.

Additional reporting by Robert-Jan Bartunek; Editing by Andrew Bolton

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