Specter of China looms over EU-US summit – POLITICO

LULEÅ, Sweden — When high-ranking European and American officials descend on this small Scandinavian industrial town on Tuesday, there will be many things they will agree on. They will agree to reject foreign interference. They will agree on more sustainable trade commitments. They will agree on new guardrails around artificial intelligence.

But the one thorny issue I still disagree on is the most fundamental of the transatlantic relationship: what to do with China.

With the likes of Valdis Dombrovskis, the European trade commissioner, and Antony Blinken, the US secretary of state, traveling to the Swedish Arctic Circle for the biannual meeting of the EU-US Trade and Technology Council, Washington and Brussels are still at loggerheads over how aggressively to push back on China’s rise in everything from global trade to semiconductors to the latest global developments famous causeGenerative AI.

That tension will be everywhere during the upcoming two-day summit, as senior officials announce new plans to work more closely on greening each bloc’s economy to provide European Union and US loans for digital infrastructure projects in Costa Rica and the Philippines, respectively.

Yet it is differences over China that are complicating these efforts to rekindle EU-US relations that have soured under Donald Trump’s presidency. Washington is eager for its ally to take a more aggressive stance on Beijing, urging Brussels to sign pledges calling out China for its alleged anti-competitive and « harmful non-market » policies and practices, according to a draft statement obtained by POLITICO .

In response, the European Commission, the executive branch of the bloc, finds itself between a rock and a hard place.

Many in the Berlaymont building, including Commission chair Ursula von der Leyen, are ready to take a stronger line on China. They view the world’s second largest economy as a geopolitical and economic threat that must be faced head on. But several EU member countries – including bigwigs like France – are more reluctant to cut ties with a lucrative trading partner, while others chafe over what they perceive as heavy-handed US tactics against China that could benefit the American companies more than their European rivals.

Margrethe Vestager, Europe’s chief digital officer, who is also attending this week’s summit, acknowledged the fine line the 27-country bloc was trying to navigate between sensitive trade disputes and the need to work with China on existential global issues . You said, however, that Brussels’ relationship with Beijing has changed over the past five years as the Communist Party of China has taken a more antagonistic stance towards parts of the Western world.

« We have a complex relationship with China, » he told reporters ahead of Tuesday’s summit. “We don’t have a European approach to this. There is no sort of European prism through which we can see the issue of economic security. »

Ctrl+F diplomacy

US officials thought he had hit a home run. When von der Leyen came to Washington in March to meet with US President Joe Biden, both leaders outlined a new coordinated position on China which many in the Beltway took to be Brussels in line with what American policymakers have been urging for years — that the West must speak with one voice against the economic and political threat from Beijing.

That stance, however, quickly became mired in internal bickering ahead of this week’s transatlantic summit, as negotiators wrangled over the fine print of what the event’s final communiqué would say about China, based on discussions with six officials and diplomats involved in those talks. They spoke on condition of anonymity to discuss the ongoing deliberations.

An early European draft, obtained by POLITICO, limited specific references to Beijing to just three — two related to foreign interference, another related to the global medical device industry — and only referred to strengthening transatlantic cooperation on economic security addressing economic coercion from “non-market economies,” a veiled reference to China. Such « Control + F diplomacy, » noted an EU official, reduced the complex negotiations to determine whether the US or the EU had won this round simply based on how many references to China could be found in the final communiqué. with a keyword search.

However, in later additions by US policymakers, also obtained by POLITICO, the diplomatic language had been changed to repeatedly refer to Beijing’s anti-competitive practices and outline a new formalized EU-US cooperation specifically to counter China’s economic powers that could be extended to other allies.

Such language, however, was removed by EU diplomats in last week’s negotiations, according to a Commission official, who spoke on condition of anonymity because he was not authorized to speak publicly. Three other officials and diplomats, also speaking on condition of anonymity, said the lack of consensus among governments on Sino-European relations made it difficult, if not impossible, to join Washington’s effort to create a formal anti-European pact. Chinese.

Two US officials, who spoke on condition of anonymity to discuss domestic deliberations, expressed their frustration at how EU officials were trying to remove references to China that closely mirrored von der Leyen. They wondered what the purpose of the commission chairman was to take a tougher line towards Beijing if it wasn’t followed up with solid commitments.

« The EU is much more reluctant to build an anti-China policy, » said Emily Benson, a trade expert at the Center for Strategic and International Studies, a Washington-based think tank. “Americans are leaning on the idea that Europe is accepting their China policy. I don’t know if I would agree with that. »

Making a brave face

Despite tensions around China, US and EU officials will rattle off a litany of shaky joint policies on everything from future telecom standards to more coordinated efforts on so-called export controls as a clear sign that transatlantic relations are stronger than never.

Brussels and Washington will double down on a joint voluntary regulation on artificial intelligence that will also be extended to include new applications like ChatGPT and Google’s Bard that have captured the public’s imagination. Both sides will also pledge to work more closely to combat foreign interference in Latin America and Africa, as well as greater coordination of sustainable trade goals, electric vehicle standards, cooperation on government and semiconductor subsidies, and labor joint venture on green energy technologies.

The only missing element is a deal on so-called critical commodities, or a deal to give European automakers and their suppliers access to billions of dollars in subsidies via the US Inflation Reduction Act. That deal is blocked due to a diplomatic dispute on how to package the deal, with Brussels wanting it written in a way that doesn’t require approval from EU member countries and Washington under pressure from Congress to get a binding deal. Dombrovskis, the European trade chief, announced last week that the commission would soon ask the capitals for a mandate to finalize the pact, realizing that Brussels could not sign such a deal on its own.

For some, this failure — coupled with continued transatlantic friction over trade relations with China — has soured what US and EU officials want the outside world to see as a meeting of minds in small-town Sweden.

« The trade dimension of the Trade and Tech Council remains an empty shell, » said David Kleimann, a trade expert at Bruegel, a Brussels-based think tank. « The forum was neither able to prevent nor resolve any significant transatlantic trade problems. »

Suzanne Lynch contributed reporting from Brussels.

This article has been updated.