- Check against Delivery -
Esteemed Members of the European Parliament, Ladies and gentlemen,
I am very happy to be here with you this morning. Let me start by thanking Business Europe for this timely and very relevant publication.
We are entering a new decade with a new European Commission, and President Ursula von der Leyen has made it very clear that this will be a geopolitical Commission.
We will be assertive in promoting our values and defending our interests.
Of course this approach is absolutely essential, given that we are faced with a very complex web of challenges in relation to trade and geopolitics. And there are few challenges more complex than China!
It is therefore very valuable to have a strategy paper like this one. The voice of business must be heard when it comes to framing a coherent European strategy for dealing with China. I am especially grateful for all the work that has gone into presenting such a comprehensive picture of the challenges faced, as well as the recommendations.
Business Europe’s standing and its EU-wide membership will ensure that this report gets the attention it deserves.
It certainly gets mine, and I hope that MS, the other EU institutions and our trading partners will also give it due consideration.
I spent last week on a diplomatic mission to the United States.
While I was in Washington, the US and China signed a Phase One trade agreement. This emphasises the complexity of global trade relationships.
Europe has to find the correct approach for its citizens and businesses in a world of unprecedented challenges, many of which you have so clearly identified in your report.
China’s growth, geopolitical ambition and distinct state capitalism model have generated an ongoing debate here in the European Union. How can we best balance the challenges and opportunities that China presents?
As identified in the Joint Communication published by the Commission and the HRVP last March, China is a strategic partner to us in many areas, but also a competitor and a systemic rival. In particular, the lack of a level playing field is too often handicapping our economic operators from competing with China on an equal footing.
This means our businesses are missing out on opportunities in our respective markets as well as in third countries. This is a serious challenge that requires a serious response.
The need for a robust approach is very well elaborated in the Joint Communication.
The communication calls on the EU to upgrade our internal toolbox and maintain engagement with China.
Your paper raises similar issues: the need for a level playing field, mitigating the impact of China’s market distortions, the need to reinforce our own competitiveness and the need to ensure that competition is also fair in third markets.
For example, the Business Europe strategy advocates the reinforcement of the EU’s own toolbox with regard to:
the adoption of the International Procurement Instrument proposed by the Commission;
addressing distortions in the internal market arising from state-ownership and state financing;
screening foreign direct investments;
And implementation of the Europe-Asia connectivity strategy, focusing on sustainability, transparency and international best practices and standards.
Many of the priorities outlined in your paper are already being pursued by the Commission, including actions arising from the Joint Communication. I warmly welcome this overlap, because it confirms that our strategic approach makes good business sense.
The Business Europe paper talks about the importance of engaging both with China and with our other partners to create a level playing field.
This year will be particularly important as we engage directly with China through a series of high-level events. The EU-China Summit is taking place in China in the spring, and additionally there will be a Leaders’ meeting in Germany in September.
To ensure proper preparation of the upcoming Summit, we hope to hold the High-Level Economic Dialogue soon.
While many European companies invest in China and benefit from its vast domestic market, I am well aware of the many challenges they face in terms of access and predictability, and the Business Europe paper highlights these difficulties very well.
We want to see China making concrete progress in relation to opening up its markets. This was one of the key commitments made during last year’s EU-China Summit. The negotiations for a Comprehensive Agreement on Investment are important in this respect: we committed to concluding the negotiations before the end of 2020.
Investment negotiations are a key tool to rebalance the relationship with China, and we are working on this as we speak.
Meeting halfway will not work for the EU, as our market is largely open. We expect an effort towards rebalancing this asymmetry.
In addition, Chinese companies in the EU already enjoy equal treatment and a fair, stable and predictable legal framework; it is up to China to level the playing field for our companies operating there.
The EU is interested in reaching a deal in 2020 but only if it is the right deal. Substance should prevail over speed.
Your paper mentions the importance of the multilateral system and the WTO for European businesses. I can tell you that the EU is determined to find solutions to the current crisis at the WTO. The fundamental root of the crisis lies in the organisations’s failure to update its rulebook to address distortions caused by non-market policies and practices.
Only by tackling these issues and creating a true level playing field will the underlying tensions in the system be addressed and the WTO remain relevant. Global rules require a strong global referee.
The EU is working with the US and Japan to push this agenda and last week we agreed a political statement setting out concrete proposals for strengthening the WTO disciplines on industrial subsidies.
This is a very important step towards tackling issues distorting global trade, and shows what can be achieved when global partners work together.
Rights and obligations in the WTO system need to be rebalanced. We can probably agree that so-called “emerging countries” have indeed emerged!
We want China to engage in the work on WTO Reform, since it has benefited from the system over the years: in our bilateral working group on WTO reform, we are urging China to engage on updating rules on industrial subsidies.
In conclusion, ladies and gentlemen, there is plenty work ahead of us.
Your paper mentions a very important point that I want to repeat here: EU unity.
This is important for EU institutions, our Member States, our economic operators and civil society stakeholders. The world notices when we are united.
So I welcome Business Europe’s paper and I hope it will be useful for raising awareness at national level, not only in relation to the challenges ahead but equally in relation to keeping us all on the same hymn sheet.
For my part I will encourage all institutions and stakeholders to look at your recommendations closely, and of course I look forward to continuing to work with Business Europe going forward.