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Not too early for EU and China to start FTA talks

By Fu Jing | China Daily | Updated: 2016-04-26 08:01

The Centre of European Policy Studies, the European Union's leading think tank, issued a report recently outlining reasons why Beijing and Brussels should launch free trade agreement talks.

The opinion of most experts is in line with that of the team led by Senior Research Fellow Jacques Pelkmans at the CEPS.

However, there have been voices claiming that although it would benefit both sides to reach a deep and comprehensive free trade deal, it is too early to take action right now.

Their arguments range from whether to give China market economy status to dealing with terrorism and the migrant crisis and economic challenges.

Apart from that, they say Brussels is busy talking with Beijing to reach bilateral investment agreement and it is more willing to conclude and ratify this agreement first before entering into free trade talks.

Compared with Brussels' reaction, Beijing has been more proactive and it has been actively pushing for such talks.

When President Xi Jinping paid his first visit to European Union headquarters in Brussels as Chinese president two years ago, he raised the idea that both sides should do feasibility study for talks on a free trade agreement.

And when Xi visited the United Kingdom last year, China and the UK agreed to push such talks at the Beijing-Brussels level.

Pelkmans' team says in its report that Brussels has slowly got used to China's urgency, which stated in its recent foreign policy update that entering free trade agreements with its partners tops its agenda.

Is it really too early for Brussels to engage with Beijing and kick off free trade talks?

The answer is no.

Some may say the market economy of China is not sophisticated enough for Brussels to consider a strategy of combined talks similar to those between Brussels and Washington on the Transatlantic Trade and Investment Partnership.

But Brussels and Beijing are already talking on an investment pact, which aims to achieve "deep and comprehensive" goals as well.

In some ways, the ongoing talks have basically shown Brussels' recognition of the openness and sophistication of China's economy, which has been developing for decades. So it is not reasonable for Brussels to postpone the free trade agreement because of China's lack of market economy status.

What's more, China has already entered into free trade agreements with a number of countries in Europe, including Switzerland and Iceland. They treat China as market economy and the agreements have already boosted trade flows by big margins.

Some may say, it would be encouraging and promising for both sides to kick off such talks but Brussels is preoccupied with other pressing tasks. However, the leadership, especially the top European leaders, should keep the big picture in mind even when dealing with the different crises the EU faces.

With the thousands of bureaucrats in Brussels, there is no problem forming a task force to officially launch feasibility studies with the aim of kicking off talks with Beijing.

China is undergoing decisive reforms, so launching the free trade talks could also help speed up domestic reforms.

From feasibility studies to ratification, being optimistic, Brussels and Beijing will need at least five years to remove barriers and establish free trade.

The most important thing now is for the leaders of both sides to take first step and agree to launch a feasibility study at their annual summit this year.

And then, negotiators from Beijing and Brussels can engage in the give-and-take process to unlock the great potential that is locked behind trade barriers.

The author is deputy editor of China Daily European Edition. fujing@chinadaily.com.cn

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