國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
54 military with several East Asian is worried about a strengthening of the People’s Liberation Army and a gradual power transition towards the Middle Kingdom.
While the State Department and the White House showed some understanding of the European position, the Pentagon refused to even discuss the topic with its European allies. When Washington requests the allegiance of its European allies they like to split the European Union, single out states and threaten their economic interests: The US Congress pushed for sanctions against companies from countries who do business with China and have branches in the States. The threats were especially pointed at Washington’s closed ally, the UK. Especially British companies saw its interests at danger, since at least two big British companies, the BAE Systems and Rolls-Royce, have huge investments in the US market.110 The Congress also sent warning signals to European Countries to implement stricter rules on military transfer. Those punishments would also hit the British defense industry the most. Beginning of 2005 the Unites States put this issue into a loyalty test of Brussels-Washington relations.
This shift in EU policy and the final end of discussion was influenced by American interference. The EU’s discussion on lifting the embargo revealed how the difference of opinions made the EU ineffective and much more important, how easily the EU can be influenced by the US.
4. The Role of EU Member States in EU-China relations
110 Financial Times, “Peter Pentagon warns EU on sale of arms to China,”
(December 23, 2004), accessed 1 July 2012, http://www.ft.com/cms/s/0/4626b21a-5514-11d9-9974-00000e2511c8.html#axzz1xqxQ078mv.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
55 This chapter will discuss the role of the 27 EU Member States in EU-China relations.
Member States governments continue to have a very important role position with regard legitimate control of transnational and international affairs, concerning public decision-making.111 Every EU member state wants to keep some degree of autonomy in the sphere of foreign policy. In other words, the EU’s China policy is based on the small common denominator of its Member States’ China policy. Generally speaking the spectrum of national foreign policy priorities towards the PRC is very diverse. In the following chapters, the role of the “Big Three” (Germany, France and UK) will be explained.
Especially their foreign policy vis-à-vis the EU policies and their “primus inter pares”
position will be an important part of the study.
The paper uses the results of the recently published study by the European Council on Foreign relations, EU-China relations have been analyzed on the basis of questionnaires and interviews conducted in all 27 member states, in Brussels institutions and in China. The paper divides the 27 EU member states into different categories according to their policies towards Beijing. Those groups are as followed:
• “Assertive industrialists” (Poland, Czech Republic)
• “Ideological free-traders” (Netherlands, Sweden, Denmark)
• “Accommodating mercantilists” (Slovenia, Finland, Bulgaria, Malta, Hungary, Portugal, Slovakia, Italy, Greece, Cyprus, Romania, Spain)
• “European followers” (Belgium, Ireland, Austria, Luxemburg and the three Baltic States)
111 Simon Hix and Bjorn Hoyland, “The political System of the European Union,” 2nd ed. (London Palgrave 2005), Hazel Smith, “European Union Foreign Policy,” (London Pluto 2002).
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
56 Table 3 pictures the division of the EU Member States. The authors Fox and Godement assigned scores to Member States’ individual policies and actions towards China,112 The horizontal axis stands for politics and the vertical axis for economics. Main policies and actions scored were positions on Taiwan and Tibet (as well as willingness to meet the Dalai Lama), willingness to criticize human rights situation in China, willingness discuss global issues with Beijing, voting on anti-dumping issues, position on trade deficit, attitude towards Chinese investment in Europe.
EU member states have different economic interests with respect to China. But there have also been examples of political rifts or dissent within the EU:
• There is no unified opinion on lifting the arms embargo. Especially France and Germany support an end of the ban. Scandinavian countries, the Netherlands and the UK are against it.
• There is no unity on granting China Market Economy Status.
• The EU was divided over the military intervention in Iraq 2002-3 (Germany and France against the war, Poland or the UK were supporting the intervention).
• EU Member States are strongly divided whether or not the EU should take protective measures against the influx of cheap Chinese goods.
112 Scored to the right or left for actions that were respectively more supportive or critical of China, and to the top or bottom for actions that were more free-trade or protectionist.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
57 Table 3: The division of EU Member States
Fox and Godement113, Erik Class
One of the determining topics between governments of the European Union is how to deal with the Dalai Lama. As already mentioned earlier the Chinese government punishes EU Member States who are meeting with the Buddhist leader and puts pressure economic on European governments. Especially France and Germany, which are both strong export-oriented economies, are interested in improvements of their trade relations with China.
While the two economies export similar goods they are competing over market shares in China.
When in 2008 the French leader Sarkozy met the Dalai Lama as well, the
113 Fox, John and François Godement, “A Power Audit of EU-China Relations”, European Council on Foreign Relations, 1. accessed, April 1.2009, July 1. 2012,
http://ecfr.3cdn.net/532cd91d0b5c9699ad_ozm6b9bz4.pdf.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
58 Chinese’s response came promptly and directly punished the French government.114 Most significantly however, was the cancellation of the EU-China summit, which was scheduled for early December 2008 in Lyon. In a way, the whole European Union was punished by China’s anger at Sarkozy and France, who held the EU Presidency at the time. In view of the pressing global problems that would have called for a coordinated response – global financial and economic crisis and climate change, to name the two most serious – the decision of the Chinese government to cancel the summit at short notice caused concern in Europe and was seen as a sign that a cooperative stance of China on these issues could not be taken for granted.
When the German Chancellor Merkel invited the Dalai Lama to the Chancellery for a private meeting in 2007, despite explicit demands by the Chinese government not to do so, bilateral relations between Berlin and Beijing cooled down. Merkel was the first German government leader to meet the Tibetan spiritual leader. The Chinese government reacted promptly and cancelled several state-to-state meetings and business deals were postponed. France took advantage and boosted France-China business relations. The German Financial Times wrote: "Germany is busy debating its policy on China while France is doing wonderful business in Beijing."115 Leaders of the “Big Three” are aware of the complicated situation. On the one hand the national governments need to make sure assist big national governments to sign important business deals with the affluent Chinese, on the other hand the European leaders need to listen to their voters and secure an on
114 New York Times, “Beijing assails Sarkozy for meeting Dalai Lama”, (December 7, 2008) ,accessed 1 July 1 2012,
http://www.nytimes.com/2008/12/07/world/europe/07iht-france.4.18467673.html.
115 Naomi Buck “While Germany Debates its China Policy, France Is Doing Good Business,” Spiegel Online International, (November 27 2007), accessed July 1 2012,
http://www.spiegel.de/international/germany/the-world-from-berlin-while-germany-debates-its-china-policy-france-is-doing-good-business-a-519960.html.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
59 human rights oriented policy towards China.116 Moreover, the harsh reactions of the Chinese government even intensified the competition between the three most important EU Member States.
The French customs of sending huge groups of French high profile manager accompanying the French president on his trip to China, raised concerns in the UK. The British business daily, Financial Times wrote: “France … flies its President – along with several aircraft full of business people – to the People’s Republic each year”.117 As scholars wrote, the British business community envied the business opportunities for their French competitors, a high level representative of the British business community told the Financial Times that the French business model is ‘exactly what we need for a new era of British interest in China’.118 As a reaction to the “success” of the French business approach, the UK adopted a commercial strategy of political support to British companies as well. In its official UK-China Strategic Framework the British government declared its goal is to
“Getting the best for the UK from China's development; … boosting our business,… ensuring the UK has the right domestic policies in place to benefit from China's growth. ”
With success: During Hu Jintao’s state visit to the UK in November 2005, the Chinese leader signed a significant big business deals with several British companies, most
116 Katinka Barysch and Charles Gran, et al., “Embracing the dragon The EU’s partnership with China,”
Center for European Reform, May 2005.
117 Jonathan Moules, “Businesses raise their profile in China,” Financial Times (February 21, 2005), accessed July 1.2012,
http://www.ft.com/intl/cms/s/0/3757a998-83ad-11d9-bee3-00000e2511c8.html#axzz1yKtykT34.
118 Ibid.
‧
significantly Rolls-Royce Trend’s sale of worth more than USD 800 Mio.119Germany also followed the French example of the ”big contracts”: In the year of 2005 the German government successfully negotiated business deals with China during a visit by the Hu Jintao. The German giant Siemens secured sales of transrapid trains worth 2 billion EUR. 120
The best showcase of how divided the European Member States is maybe the textile disputes between the European Union and the PRC. The main event was when the EU decided in 2006 to extend tariffs on shoe imports from China and Vietnam for another 15 months.121 It was the highlight not only of a trade dispute between the EU and China but also an internal hot debate between the EU Member States. Especially the economical troubled Mediterranean economies of Spain, Portugal and Italy were the biggest advocates of imposing tariffs on China.
The dispute also commonly known as “Shoe Wars” is a protectionist measure by the EU, which is trying to protect Spanish, Portuguese and Italian producers.122 The industry of shoe manufacturing is still rather big in Spain, Portugal, and Italy as well as in East European EU member states such as Romania: In Italy were more than 10,000 enterprises employed in shoe manufacturing in 2007, in Spain more than 4,000 and Portugal almost 3,000. The industry in the EU has been in decline in recent decades. This
119 Nicola Casarini, “October 2006 The evolution of the EU- China relationship: from constructive engagement to strategic partnership,” Political Science, (vol. 33, no. October 2006), accessed July 1.2012.
http://www.iss.europa.eu/uploads/media/occ64.pdf.
120 Business Library, “Transrapid wins maglev deal in shanghai - World report,” (March, 2001), accessed July 1.2012 http://findarticles.com/p/articles/mi_m0BQQ/is_3_41/ai_81006263/, BBC, “German train deal for Shanghai” (21 January, 2001), accessed July 1.2012, http://news.bbc.co.uk/2/hi/europe/1129295.stm, 21 January, 2001.
121BBC, “EU extends Chinese shoe tariffs,” December 2009, accessed July 1.2012, http://news.bbc.co.uk/2/hi/8426432.stm 22.
122 Ros Davidson, “EU-China tariff war hits shoes,” The Guardian, (7 April 2006), accessed July 1.2012, http://www.guardian.co.uk/business/2006/apr/07/china.globalisation.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
61 trend has been accelerated by the competition from low-cost producers in China. Since 1995, due to international competition, Italy has lost around 5,000 shoemaking enterprises.123
However, the road to a final decision by the European Commission was very long:
There was a significant division by among the Member States on the issue. Big importing countries without a domestic shoe-making industry were imposing an extension. Italy, Spain and other Southern European countries with small and less competitive shoe makers were favor of it. especially the UK and Northern European, however, were against this anti-dumping measure. Their argument was the importance of free trade and the benefits of European consumers.124
In July 2006 the first proposal by the Commission for the anti-dumping measures was dismissed by the Member States. Thus, the Commission designed another proposal.
But it was also declined on 3 August. 14 EU Member states out of 25 voted against it.125 Unable to solve the problem the Commission submitted the same proposal to the Council at the end of the August. The Council itself was under pressures to provide a solution because the provisional duty was due to expire on 7 October. Various reports on the maneuvers of the member states came out in September.126 On 27 September the Committee of Permanent Representatives (COREPER) discussed the issue. A vote again rejected the Commission proposal. 9 Member States supported it, 14 voted for ‘No’, and
123 Ding Qingfen’ “China files WTO plaint against EU shoe levy,” ChinaDaily, February 5.2010., accessed July 1.2012, http://www.chinadaily.com.cn/bizchina/2010-02/05/content_9433402.htm.
124 Ibid.
125 Shu Min, “Dealing with an Emerging Economic Power: The EU's Trade Policy towards China,” (ECPR Joint Sessions of Workshops), (Lisbon, Portugal March 2009
126 It was first reported that Austria proposed to apply the Common proposal only for one year on 13 September.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
62 2 abstentions were counted.127 On 4 October in a melodramatic turnaround the COREPER finally voted for a proposal made by the French government. The voting result was 9 ‘Yes’, 12 ‘No’, and 4 abstention.128 With abstention counted as approval, the revised anti-dumping measures were adopted by the smallest possible margin. It is significant that states such as Italy, Spain and Portugal who account together for two third of the total EU footwear production, were able to lobby for an extension which was not only inefficient but also revealed EU’s ability to enforce effective measure and secure all Member States interests. The other problem, which this example show is, that trade disputes with China are becoming more and more politicized and some Member states were willing to fight against each other. In an effort ease the division of the EU Member States and to finally find compromise he pleaded:
"I appeal to member states to take the long-term view. The price of rejecting my proposal is harm to the consumer. The gain is keeping the agreement alive and the overall restrictions in place over the next three years."129
The case studies given in this chapter show how the divisions between the Member States lead to an inefficiency of formulating a strong China polity at EU level. Even though Member States have different ideas about how to interact with China’s, an important reason for the division is the belief of national governments that they can gain more by a national China policy than from an integrated EU approach. In most cases, however, the concessions by China to single Member States on any major issue are mostly small and the Member States only profit in the short run. Furthermore as the case of the textile dispute shows the division also weakens the position of the EU in international
127 Shu Min, “Dealing with an Emerging Economic Power: The EU's Trade Policy towards China,” (ECPR Joint Sessions of Workshops), (Lisbon, Portugal March 2009.
128 Ibid.
129 People’s Daily, “Online, EU trade chief urges unblocking of Chinese textiles,” (August 31, 2005), accessed July 1.2012, http://english.people.com.cn/200508/31/eng20050831_205434.html.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
63 negotiations and benefit above all the negotiating partner – in this case China.