As China endorses a reformer as president and the EU and US plan a free-trade pact, the competition to set trade rules heats up. A EU-US pact would strengthen their economies and send a signal to China to take more responsibility for higher trade standards.
On one side of the globe this week, China opened its annual legislative meeting to endorse the new Communist Party leader, Xi Jinping, as the country’s next president. High expectations have been set for Mr. Xi to radically reform the Chinese economy – but by what standards isn’t yet clear.
These two events in the world’s largest economies are the latest moves in an ongoing contest to define the values that drive international commerce.
The overriding reason for an EU-US pact, Mr. De Gucht told the Monitor, is to ensure that standards used by Europe and the US – such as openness, rule of law, respect for rights – can be universal in a world challenged by China’s norms of behavior, such as a lack of transparency and mercantile favoritism toward state-run enterprises.
The EU does not want to be aggressive toward China nor is it being defensive, De Gucht said. Rather, because China is no longer an emerging economy, it must take responsibility for improving the international system.
“They are entitled to a place in the universe,” he said.
Yet, De Gucht points out, China “doesn’t have a strategic approach to remodel the world.” So in the meantime, the US and EU must band together to find an equilibrium with China and its brand of “authoritarian capitalism.”