European Union and China Relations in the Light of Changing Global Order

European Union and China Relations in the Light of Changing Global Order

Sedef Eylemer (Izmir Katip Celebi University, Turkey) and Elif Cemre Besgur (Dokuz Eylul University, Turkey)
DOI: 10.4018/978-1-7998-1188-6.ch025

Abstract

The European Union (EU), United States (US), and China are the main global drivers of the international trade system. However, trade wars between them create tensions in the world. As the world is facing increasing neo-protectionist trade applications of the Trump administration, this chapter analyses whether a greater convergence between China and the EU is possible for protecting multilateralism through two case studies, namely (1) market conditions and discrimination, (2) cybersecurity. In this context, the chapter argues that although the US pressure has led the EU to rapprochement with China, this situation creates a dilemma for the EU in terms of the fears about the problems of alignment with the normative identity of the EU. Whereas the EU aims at regulating the global trade on a normative basis originating from its acquis, China has a more strategic perspective based upon specific relationship context. It is difficult to take a side for the EU due to its different standpoint compared to China in defending the multilateral trading system.
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Introduction

The deadlock in the Doha Round of World Trade Organization (WTO) has diluted the belief in the principle of multilateralism pushing the countries to conclude bilateral or regional trade agreements rather than multilateral ones. This situation has altered the reference point of multilateralism as well. Due to this shift in the global economy, bilateral Free Trade Agreements (FTAs) and in particular Mega Regional Trade Agreements (MRTAs) with their quite wide scope have become the landmark of the contemporary perspective on multilateralism (Kıncal and Utkulu, 2018, p. 330). Due to this global transformation, both the European Union (EU) and the United States (US) decided to conclude MRTA with each other and FTAs with the other third countries to cope with the increasing competitive pressure in particular from China and other emerging countries. Even though under Obama administration the US and the EU made good progress to isolate China in the world trade, the climate has completely changed with Donald Trump’s presidential victory in the US. Since his main claim is based on altering liberal trade order according to the sole interest of the US, Trump has implemented numerous neo-protectionist policies against mainly China but also other countries including European countries.

This situation has adversely affected the global trade order. In particular, the recent confrontations between China and the US for influence and dominance in the world is a significant threat for the multilateral trade system. This new global setting is pushing the EU not only to support multilateralism but also to align with partners to defend it. Within this context, the possibility of enhancing the relationship between the EU and China comes to the forefront as an issue to be addressed.

In light of these developments, this article’s main focus is on EU and China relations in the context of the uncertainty created by the US in the global trading order. The article mainly aims to question whether a greater convergence between the EU and China is possible in order to protect multilateralism. This research question will be addressed through two case studies namely (1) market conditions and discrimination, (2) cybersecurity. These two cases which form essential elements of global free trade order are also critical for the EU’s Market Access Strategy to tackle market and investment barriers as part of its global trade policy. Besides the market conditions, cybersecurity-related measures which are in essence legitimate policy tools can be also used as a new prominent type of barriers for businesses and investors.

Hence, the article will firstly elaborate on the changes in the global order following the Doha Round, particularly considering the impact of neo-protectionist measures of the Trump administration. In the second section, EU-China relations will be examined through the convergences and divergences in the positions of the both sides under the shifting circumstances of global order. In this sense, this study aims to shed light on key developments in the complex relationship between the EU and China. In the third section, the two cases will be evaluated with reference to the European Chamber of Commerce’s Business Confidence Survey 2018, the European Commission Report on Trade and Investment Barriers 2017 and the recent cybersecurity law in China to address the research question. According to the findings, whereas the EU aims at regulating the global trade on a normative open-trade understanding originating from its well-developed acquis communautaire, China has a more strategic perspective based upon the development of specific relationship contexts and trade-restrictive measures. Therefore, the conclusion is that although the US pressure has led the EU to rapprochement with China, this situation creates a dilemma in terms of the EU’s fears about China’s extreme empowerment and the problems of alignment for China with the normative identity of the EU. Thus, it is argued that it is difficult for the EU to take a side with China as a long-term ally due to its different standpoint and priorities compared to China in defending the multilateral global trading system.

Key Terms in this Chapter

Reciprocal Market Access: Against discriminatory trade policies, having the same set of rules between trading parties in order to have a balanced trade partnership.

Multilateralism: Unlike unilateralism, it means the cooperation of many international actors in various fields.

Acquis Communautaire: It represents the legal framework of the EU which consists of binding rules and obligations.

Westphalian State: It means modern state in which protecting national sovereignty is at the forefront.

Guanxi: The source of interest-based and contextual norms and rules of China.

Trade War: It occurs when a country imposes tariffs on imported goods in order to protect its own economy.

Normative Power Europe: Based upon Manner’s (2002) explanation, it is defining the ‘normal’ in EU’s relations with other states with reference to its norms and values.

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