In efforts to counter Donald Trump’s tariffs, EU Commission President has come up with the idea of building a trade coalition with a group of countries of the CPTPP.
We should probably clarify what the CPTPP is, given that this trade alliance has been relatively little known in Europe so far.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) bloc is a Pacific-centric trade group that includes like-minded nations such as Japan, Australia, Canada and Mexico. It is also important to note that the group now includes the U.K. as well.
In June, Ursula von der Leyen floated the idea that the EU’s 27 countries could join forces with 12 members of the CPTPP to form a new world trade initiative. According to information available on this plan, the U.S. would not automatically be invited.
’The new grouping would redesign the rules of global trade, she said, reforming or perhaps even replacing the now largely defunct World Trade Organization.’, Ursula von der Leyen said, after presenting to EU Member States’ leaders the idea of forming a coalition with CPTPP. As for including America into the group, she stressed that it would be up to the EU and the CPTPP to decide whether the U.S. would be allowed to join their project, which position, in light of the helpless situation she has led herself with both the US and China, seems to be rather aggressive.
However, the idea won public endorsement from German Chancellor Friedrich Merz. ’If the WTO is as dysfunctional as it has been for years and apparently remains so, then we, who continue to consider free trade important, must come up with something else,’ he said, showing full support for von der Leyen.
With new times come new ideas and plans. We are used to this, just as we are used to the fact that often very little of these plans ever actually gets realised. But it should be noted that from the perspective of European citizens, fighting back against Trump’s ’disruption’ does not seem to be a healthy approach.
Now that, considering that in terms of trade, the EU is planning to turn to Asia, two key questions need to be raised: where is China in this new plan and, as part of the plan, is the EU about to make a U-turn towards China?
It is inevitable to discuss the role of China in the context of the EU’s ambitious trade plans for several reasons.
First and foremost, given that EU-China Summit will be held on 24-25 July in China to mark 50 years of diplomatic relations. Ursula von der Leyen and European Council President António Costa will travel to China ’in a time when relations are marred by trade disputes and European frustration over China’s assistance to Russia in its war against Ukraine.’, according to POLITICO.
A major source of tension in EU-China relations is that, in 2024, China launched an anti-dumping investigation into pork imports from the EU (a six-month extension of which was announced in June by Chinese authorities), as Beijing’s response to the EU’s recent decision to impose tariffs on of up to 45% on Chinese-made electric vehicles (EVs). China sharply criticised the EU’s EV tariffs as protectionist, warning of ’necessary measures’ to defend national interests, signalling that the extension of the pork probe might now be part of a broader strategic play.
In addition to tariffs on EVs, the EU announced restrictions on Chinese medical device makers. With this decision, Brussels wanted to limit the access of the Chinese companies to public procurement contracts in response to Beijing’s ’Buy China’ policy, which disadvantages EU firms in Chinese markets.
According to experts, another potential flashpoint in EU-China relations is China’s restriction of rare earth mineral exports, which are critical components for many EU manufacturing sectors.
According to preliminary information, both sides hope that the EU-China Summit will serve as a platform to recalibrate their economic ties and potentially defuse the trade disputes.
If the EU does indeed reach out to China, the President of the European Commission should be confronted not only with the pragmatic question of what has been the point of imposing tariffs on China, but also with the universal question of what has been the point of China’s demonising in the EU over these years?
If we look at the existing platforms of cooperation between EU countries and China, the Belt and Road Initiative (BRI) can be named on the first place which is a global connectivity vision and development strategy launched by Xi Jinping in 2013. The BRI is an ambitious plan to develop two new trade routes connecting China with the rest of the world. But the initiative is about far more than infrastructure, an analysis by the international affairs think tank Chatham House says. According to foreign policy experts, the BRI contributes to the extension of Chinese influence into developed European nations. With the concept of debt-trap diplomacy used by China, the BRI is just a form of neo-colonialism, which brings new risks to Europe, experts warn.
’By all appearances, the BRI is in retreat, with Chinese infrastructure spending down around the world as Beijing deals with a troubling track record of BRI corruption, waste, debt distress, and failing projects. (…) But as the infrastructure and ambitions for the BRI fade, something more dangerous may be rising up to take its place – an authoritarian alliance of security, surveillance, and repression that puts Europe at risk.’, Elaine Dezenski writes in an article on Euronews.
As for the situation in member states, Greece and Hungary has strengthened their relations with the BRI (a port at Pireus, and a railway between Hungary and Serbia can be listed as the most successful BRI projects in these countries), but some EU countries have expressed concerns about the BRI. Moreover, in 2023, Italy have officially left the initiative. Non-EU Serbia also should be mentioned here with its excellent relations with the BRI.
As can be seen from the above examples, despite warnings, some member states in both Eastern and Southern Europe are still ready to work with China on massive infrastructure projects that they could not afford on their own. These countries also claim that building economic and trade relations with China is in their best national interests and these relations are based on pragmatic grounds stressing that this a win-win cooperation for both sides. At the same time, in some member states in Western and Northern Europe, the fact that these projects are financed by Chinese loans under the BRI raises a red flag.
Such a division can also be observed not with regard to the willingness of the member states to cooperate with the BRI, but also in general terms, concerning the overall cooperation with China. With regard to Central and Eastern Europe, this part of Europe shows more pragmatism in its ties with China. China-CEEC, also known as 14+1 (formerly 17+1 from 2019 to 2021) is one of the best examples of a Central-Eastern European pragmatism. This format was founded in Budapest in 2012 and its goal is to promote the Belt and Road Initiative and enhance cooperation in the fields of infrastructure, transportation and logistics, trade, and investment.
As the EU and China eye the summit on 24-25 July, it will be really interesting to follow the events and the results of this meeting given that according to indications, Europe is just about to reconsider its relations with China. As part of this process, a number of member states are likely to become more open to Chinese investments, not to mention the fact that a growing number of the bloc’s members are likely to claim that a renewed partnership with China could be the new engine of the EU. If this big U-turn in EU-China relations actually happens, those member states that have been seeking good relations with Beijing will have a definite advantage, not to mention a moral victory they win in this matter.
In addition, if this shift really happens, the President of the European Commission should feel free to resign, because it would mean that most of the EU has been holding back from cooperation with China, following her ill-judged political guidance over the years. It is reasonable to assume that if this pragmatic cooperation with China had been launched years earlier, the EU economy would not be on the brink of collapse.
