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Last Updated:[13-05-2013 02:16:14 EDT] Zoom in Zoom out Back to Tradenews

Trade Wars- EU Hesitant on Free Trade Deal with China

tradenews China, arguably the fastest growing economy in the world, and one of European Union’s biggest trading partners, isn’t looking good to get that elusive Free Trade Deal with the EU anytime soon.

The EU, a global trading behemoth, is open to establishing free trade deals with the United States and Japan but feels that a planned investment accord is the most sensible next step when dealing with China. As quoted by an unnamed EU official, the Free Trade Agreement (FTA) could present itself as the logical next step in this evolving relationship.

EU is China’s largest market in terms of sales volume and revenue generated and a Free Trade Agreement (FTA) would obviously help the Chinese cause. Last month, when EU foreign affairs head Catherine Ashton visited China, the FTA issue was the prominent item on the table next to the spicy Shezwan Rice and Peking duck. EU’s current stand holds on the fact that a FTA with the United States at this point will have a kickback effect that will positively influence EU’s trading relations with China too.

The EU official notes that the biggest challenge ahead of the EU at this moment is to convince the Chinese trading interest that a delayed FTA, and a positive approach with the USA, isn’t a case of favouritism but the act of adding more complex and lasting strands into this lucrative Sino-EU relationship.

Beijing, on its part, believes that this latest development is a US sponsored effort to undermine its growing power in Asia and the Pacific. Thus, while the FTA might be a definite possibility in the coming times, a series of recent disputes arising over market access could potentially play spoilsport and delay the inevitable.

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