Wednesday, December 18, 2019

The Tricky Trade Triangle

by Victoria Prince, MAEUS student

This blog post was written for the course "Dialogue on Europe" during the Fall 2019 semester.

Photo modified from the
Public Domain by the EUC.
The European Union, the United States, and China are currently in a very precarious balancing act when it comes to trade relations.  With tariffs being thrown around like footballs on Thanksgiving, each actor needs to decide what their policies are in each relationship and how the other leg of the relationship triangle affects those policies.  The US and China's trade wars is the instigator for the trouble at the table.  With the tensions emanating from here, China and the EU have used this opportunity to season their own trade relationship.

The business between China and the European Union is hard to define, because of the individual nations that make up the EU.  The European Union would like a united front in its dealings with China, especially as it condemns China's human rights violations.  But as countries are willing to forego these reproaches in pursuit of their own economic benefits this family dinner is looking more like a potluck.  Germany is spearheading this ignorance of EU positions by putting trade before human rights with Chancellor Angela Merkel's visit to China in September.

This isn't the only time that Merkel has been criticized for Germany's dealings with China.  Germany received a very negative response when it opened its telecom market to China's Hwawei company.  The move was considered to be dangerous as it could allow for Chinese hacking in Germany and beyond.  The United States found this to be in very bad taste and has led to questions of future relations between Berlin and Washington.

The United States isn't only upset with Europe for this foul play, as it recently imposed tariffs on EU goods in response to the Airbus vs. Boeing dispute.  But the EU is taking the higher ground here and pledged to not retaliate with tariffs of their own.  The EU and US relationship has not strengthened with the US's focus on China in trade, which is of benefit to Beijing.

The trade war between the US and China has also negatively impacted the relationship between the EU and China.  As China focuses on the United States it is leaving Europe on the backburner.  Europe needs to reassess its current position.  Food was the centerpiece of a recent trade deal that put China and the EU back on the trade map.  This deal was cooked up in an effort to protect regional food names like Gorgonzola and Roquefort from Europe or Nanjing salted duck and Pu'er Tea from China.  This does instill protections for European and Chinese producers but makes it harder for those from other countries to market similar products internationally, such as the case with American blue cheese producers.

Is a focus on Chinese trade really a good thing for Europe, or is it beneficial to China by separating the EU from the US even more?  The European Union public views Chinese trade practices as a threat and they may have merit.  China's goals may be to not only insert a wedge between Europe and the United States, but to also divide the EU on policies to weaken it even further.

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