China foxed

 Editorial |  2017-10-08 14:56:39.0

China foxed

After several months of discussion, the European Union and its member states agreed on a draft law to strengthen the bloc's trade-defence rules. As expected, under the influence of US president Donald Trump, it was designed to protect European industries and jobs against non-EU countries, particularly China. Under the new law – which would be implemented before the end of the year – the EU would implement anti-dumping and anti-subsidy measures on all countries exporting below domestic prices, without taking cognizance of their memberships of the World Trade Organization (WTO). But, what this new law has scripted discreetly is that the US and China are virtually serving up another Cold War. Besides, members of the EU, the liberal middle powers in the Asia-Pacific region such as Japan, South Korea, and Australia are also important players in this ongoing mind-game. Undoubtedly, this transient global order was based on the US-led exchange of security for free trade.

However, with the relentless rise of China's market economy and industrial power, the Asia-Pacific strategic space is now in a critically evolutionary phase. As the geopolitical hierarchy is now splitting between the military order, which is still dominated by the US, and the economic order, where Beijing seems to be overtaking Washington, the new law is tightening the noose around the dragon. The European grouping finalised more than 40 anti-dumping and anti-subsidy measures, with 20 of them against Chinese products. Not only that, out of a total of 32 trade-defence investigations, 22 are into imports from China. The EU's anti-dumping policy prompted a response from Beijing. Beijing, a member of WTO since 2001, has repeatedly called on the EC to recognise it as a market economy and stop using price comparison with other countries to work out whether Chinese companies are exporting products at unfairly low prices. Till a few months ago, it was thought that Trump's 'America First' doctrine would have pushed Brussels closer to Beijing, to cement the Sino-European cooperation to defend free trade and open markets globally.

But the EU's current protectionist drive is not a by-product of the US trade policies with China. It is the result of a reflection initiated well before Trump's election, which centred on the idea that free markets must be made a little bit fairer. Nonetheless, as the existing spaghetti bowl of their economic partnerships levitate under increasing geopolitical strain, the liberal Asia-Pacific middle powers had better draw up possible synergies with European trade partners looking for an alternative to China's new Silk Roads, as well as with those of Latin American countries with an appetite for new geopolitical routes outside of the US influence across the Pacific Ocean. It would certainly provide a better way to nurture more balanced geopolitical postures in a multi-polar world for the liberal blocs of Eurasian and Pacific middle powers.


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