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China, EU Striving to Map out New Agreement
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China and the European Union (EU) are making efforts to map out a new agreement, aimed at nailing down their strategic partnership into legal framework amid ever stronger political and economic relations.

Talks on PCA announced

On Sept. 9, Chinese Premier Wen Jiabao and EU leaders formally announced at the 9th EU-China Summit in Helsinki that China and the EU had agreed to launch negotiations on a framework agreement, which would encompass the full scope of their bilateral relationship.
The new framework agreement, or the Partnership and Cooperation Agreement (PCA) in EU terminology, would reflect the full "breadth and depth" of the current comprehensive strategic partnership between the EU and China, European Commission (EC) President Jose Manuel Barroso said during the summit.

The new framework agreement will update a 1985 trade and economic cooperation agreement between China and the European Economic Community, the predecessor of the EU.

"This symbolizes that the China-EU relations have entered into a new stage and it has injected new impetus and vigor into the bilateral ties," Guan Chengyuan, Chinese ambassador to the EU, told Xinhua in a recent interview.

European Commissioner for External Relations Benita Ferrero-Waldner hailed it as an "important breakthrough."

Ferrero-Waldner said the current legal framework for the EU-China relations was a "trade agreement," and it failed to reflect the reality of the current EU-China ties.

The EU-China relations were "much broader" now, said Ferrero-Waldner, adding that the bilateral ties comprised many dialogues in the fields of politics, trade, energy, education and climate change.

"Therefore, the new partnership agreement would indeed show all the breadth of our relations with China," the commissioner said.

Guan said that launching the talks demonstrated the maturing of the relations between China and the 25-member bloc in an all-around manner.

Political ties reinforced

The year 2006 has seen frequent reciprocal high-level visits by Chinese and EU leaders.

Wen's tour to the EU-China summit in September also took him to Britain and Germany.

Quite a few European leaders also visited China in 2006, including French President Jacques Chirac, German Chancellor Angela Merkel and Italian Prime Minister Romano Prodi, as well as many commissioners of the EU headquarters.

European Parliament (EP) President Josep Borrell Fontelles traveled to China in July, marking the first visit by a top EP official to China in 13 years.

Thereafter, Fontelles rebutted the theory of "China threat" in an article, noting that there was no reason for the Europeans to feel threatened by an awakening China.

In the meantime, the vice-ministerial level of strategic dialogue between China and the EU continued in 2006.

In addition, China and the EU have conducted very frequent and fruitful coordination and consultations on international issues, especially on the Iranian nuclear program.

Trade soars despite disputes about shoes

Bilateral trade continued to boom in 2006. The EU remained the No.1 trading partner of China, while China continued to be the second largest trading partner of the EU.

Their trade hit US$218.9 billion in the Jan.-Oct. period, and is expected to surpass US$250 billion for the whole year.

"Such a rapid pace has surprised us. It is also beyond the EU's expectation," Guan said.

The EU's investments in the Chinese market have so far exceeded US$50 billion.

EU slapped anti-dumping taxes on Chinese shoes this year. The action not only triggered a dispute with China, but also met opposition from inside.

The EU member states voted "no" on EU Trade Commissioner Peter Mandelson's proposal on imposing punishing taxes and a "discounted" proposal was passed with a narrow margin of 13 to 12.

"Both the EU and China should properly handle the trade issue from a long-term strategic perspective," Guan said.

The economic cooperation between China and the EU had great potential and complemented each other, he said, noting that seeking mutual benefit should become a basic principle to handle trade disputes.

Policy paper sets PCA tune

The EC adopted a policy paper in October on its relations with China, vowing to continue to seek "engagement" and "partnership" with China.

The policy paper, titled "EU-China: Closer partners, growing responsibilities", was the sixth of its kind ever released by the EC and the first ever adopted by the current EC.

It said that China had become the world's 4th largest economy and 3rd largest exporter, as well as an increasingly important political power.

"The core message we want to send to Beijing is that we should continue to engage with China, and deepen our strategic partnership," Ferrero-Waldner said.

The policy paper was accompanied with a policy document on trade and investment.

The document titled "Competition and Partnership", first of its kind ever released by the EC, set out a number of policy priorities on its trade and investment with regard to China.
It said, among other things, that the EU would push China to fulfill its WTO obligations, continue to open its market and strengthen the fight against intellectual property rights infringements.

The policy paper, as a matter of fact, had set tune for the talks on the PCA with China, said Stanley Crosscick, a senior researcher with the European Policy Center, which is the EU's think tank.

Intense diplomacy ahead

In early January, Ferrero-Waldner will visit Beijing where he is scheduled to officially start the talks on the PCA with Chinese Foreign Minister Li Zhaoxing.

"We are actively making relevant technical preparations and we have intensive contacts with the EU," said Guan.

An EC official, who declined to reveal his name, said previous PCA talks with Central Asian countries usually took two to three years to complete.

Guan said such talks covered various areas comprehensively, which are very large in scale and very wide in scope, so it is unrealistic to seek a conclusion within a short period of time.

"We hope, through the efforts from both sides, we can make the process shortened and finalize the pact as soon as possible," he said.

(Xinhua News Agency December 11, 2006)

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