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EU and US to sign Free Trade deals with China? Possibly

Serious suggestions – including a draft strategy from the EU diplomatic department – emerged in both the EU and US on May 21 for starting free trade talks with China.

In the US, the China-United States Exchange Foundation launched a report on May 21 claiming that the countries “should begin early-stage discussions of the opportunities and challenges of an eventual bilateral free-trade agreement” The Foundation’s steering committee includes Bill Gates and Henry Kissinger, and authors of the programme include a Nobel laureate, economist Michael Spence of New York University.

The report, “U.S.-China 2022,” urges that a study of “the feasibility and the benefits” of a free-trade agreement be completed within a year of commencement, and that “if the results of the study are positive, then a process toward negotiations should be initiated.” In addition, the report says the countries should complete negotiations on an investment treaty “as soon as possible, preferably within one year.” No serving member of the current US Administration could be found to make any comment on the idea.

In Europe, a similar idea has gained more official endorsement. A Reuter’s reporter on May 21 said he had seen a document written by the EU’s diplomatic service arguing that 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”.

The document was a proposed EU response to a proposal Beijing made in 2012 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.

Germany and some other member states reacted to the proposal in a mid-May EU trade meeting by saying said the European Union should seek to conclude a partnership and cooperation agreement (PCA) with China, which the European Union launched in 2007 and remains stuck in talks, before examining an FTA. But commentators said negotiations on the proposed PCA had stalled because, in the words of another EU document, they “were stuck due to different levels of ambition on the two sides and no progress could be foreseen in the future”.

The simple suggestion of a free-trade agreement with China concerned other EU member countries such as France and Italy, who led objections to the strategy proposals at the EU trade meeting.