As we report on the increasing import demand in China, and particularly in the context of products such as cheese and liquid milk, the prospect of a possible EU-China free trade agreement impacting this trade seems ever more intriguing.
Diplomatic relations between the EU and China were established in 1975; by 2003 a ‘Strategic Partnership’ was in place between the two, but the next logical step in developing EU-China relations – a PCA (Partnership and Cooperation Agreement) to replace the 1985 EC-China Trade and Economic Cooperation Agreement – has yet to be achieved, despite the resumption of talks in 2007.
China has long been aggrieved at the EU’s refusal to grant the country ‘market economy’ status. MES status would increase the immunity of Chinese companies from EU accusations over limited market access, entry restrictions on the Chinese market and anti-dumping measures. The Chinese justifiably accuse Europe of double standards over the issue as the same status has been given to Russia and Ukraine – though in any case by 2016 the WTO agreement to the same effect will come into force automatically.
Some European states want a PCA before an FTA is on the table. The UK is out of step in Europe in pushing for the FTA, but couldn’t this result in lower cost products in both regions, increased tourism and investment and some added impetus for the reforms underway in China? There are clearly significant arguments against this proposition as well. Yet if European dairy suppliers are to compete against the access to China which New Zealand, for instance, has achieved, then an FTA would surely be a step in the right direction from their perspective. Likewise for the world’s
large-scale buyers of dairy commodities, for whom impediments to free trade certainly form a problem from which they’d like to be free.
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