EU-US Trade Council Discusses Tariffs Aimed at Overcapacity, Forced Labor Laws
A trade expert who once worked in Hong Kong said the joint statement issued after the U.S.-European Union Trade and Technology Council inaugural meeting shows that prospects for a trans-Atlantic united front against China aren't promising.
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Stephen Olson, a senior research fellow at the Hinrich Foundation, and former Pacific Basin Economic Council president, wrote that little was agreed to at the meeting in Pittsburgh this week. He characterized the statement, which said “[e]xchange information on the impact of non-market, distortive policies and practices in third countries and explore ways of working together and with other partners with a view to addressing the negative effects of such policies and practices,” as only a promise to exchange information.
“Both sides largely agree on the challenge posed by China. The recent EU Indo-Pacific strategy paper highlighted many of the same concerns held by the US. But the devil is in the details, and there is wide divergence on tactics and strategies,” Olson wrote. “The US is more comfortable with an overtly confrontational stance. The EU prefers a more oblique approach not specifically targeted at China, which it hopes will 'nudge' China in the right direction.”
The joint statement said the EU and the U.S. would each make an inventory of the domestic measures each has for countering commercial abuses, and evaluate the measures' effectiveness. “To the extent practicable or deemed desirable by both the United States and the European Union, [we will] consult or coordinate on the use and development of such domestic measures, with a view to increasing their effectiveness and mitigating collateral consequences for either the United States or the European Union from any such measure developed,” the statement said.
One of the biggest human rights issues the U.S. identifies in China is the genocide against Uyghurs, who are often imprisoned and are victims of forced labor around the country, studies say.
“The EU is attempting to walk a narrow tightrope. It wants to assert its interests vis-a-vis China and take a strong stand at least rhetorically when China’s actions violate European values. But it does not want to 'rock the boat' economically or jeopardize the commercially beneficial arrangements so many European companies have in China. This will become progressively more difficult as China has signaled that the West should not hope to compartmentalize its relationship with China. For example, it will be difficult to criticize China’s human rights practices on one hand, and also look to cooperate on climate change or commercial matters,” Olson wrote. “The picture is further complicated by divergent views across the 27 EU member nations on how to best engage China.”
The EU and the U.S. agreed to combat the “scourge of forced and child labor, with each side using relevant trade policies and tools, including [free trade agreements] and unilateral measures, such as preference and other programs, and cooperating in the” International Labour Organization, the World Trade Organization “and other appropriate multilateral fora.”
At the WTO, the EU agreed to back the U.S. proposal that the fisheries negotiations cover forced labor on ships.
The statement said they would “share information and best practices on trade measures related to the respect for fundamental labor rights and prevention of forced and child labor, including implementation and enforcement; new initiatives of each side, with a view to developing additional and joint ways to prevent forced labor; and the effectiveness of labor enforcement tools, with a view to improving them.”