Former EU Trade Commissioner Says EU Has Woken Up to China Challenge
Lord Peter Mandelson, a former trade commissioner for the EU, told an audience at the U.S. Chamber of Commerce that while trade policymakers were once naive on China, precluding competition from China is also not the best course of action for Europe's economy.
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Mandelson, who spoke at the Chamber's and BusinessEurope's Transatlantic Business Summit, said that with European Parliament elections coming this year, it's not clear how the EU will come down in its trade defense case for electric vehicles or other trade remedy investigations, or how much it will restrict its outbound and inbound investment ties with China.
"The EU generally does want to be on the same page as the U.S. geopolitically, and we are in earnest in seeking that, as is the United Kingdom," he said. "But we in Europe do not want to see our economic relations with China framed simply by the U.S.-China faceoff."
"I don’t believe we will increase our productivity in Europe … by putting a wall around our economies," he said, adding that competition brings new products, innovation, dynamism and prosperity. "We have also to be realistic and recognize a lot of the competition from China is not fair," he added. "There is need for trade defense measures and instruments to be used."
Mandelson said EU countries agree, as the U.S. believes, that China has used its state capitalism model to dominate green technologies and create unhealthy dependencies abroad.
However, Mandelson was critical of the Biden administration's trade policy, which he said talks of friendshoring but does not back it up with any inducements to increase trade with the U.S. He said that the U.S. government is "continuing to pursue an America first policy, albeit more politely phrased under President Biden."
He said the case China has begun at the World Trade Organization over the tax credits in the Inflation Reduction Act poses a dilemma for the U.K. and the EU. "They agree with China that the bill is discriminatory," he said.