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Peter Mandelson has found the shrewdest use so far of the Olympic row to put pressure on China. On the verge of the European Commission’s largest trade mission to China, the Trade Commissioner has delivered an eloquent speech, all China could have asked for, in telling countries not to humiliate it by boycotting the Olympics, and calling the threats a “political gimmick”.
There is something to be said for that argument on its own but Mandelson has strengthened its appeal further by making it part of a bargain. In the same breath, he has asked China for precise and rapid concessions on its trade tariffs, as part of the Doha round of trade talks. It needs to do more to show that it fully accepts its part within international laws, he argued this week. He has also called on it to do more immediately to curb greenhouse gases.
Any progress in bringing China within those laws and institutions – such as the World Trade Organisation – is valuable even if the current round of world trade talks fails. Mandelson has been saying for some time that if the Doha round is not concluded before the end of George Bush’s presidency, it will never happen. Despite this year’s flurry of progress in the talks, to talk of its survival is still probably too optimistic. An actual conclusion of the talks is rapidly moving beyond Bush’s reach into the next presidency and Congress. It is very likely, as Mandelson has cautioned, that the Doha round itself will not survive that extension, having already been passed from one negotiating team to another for seven years, like a barely smouldering Olympic torch.
But securing some movement from China would be a valuable legacy, even if these talks never turn into a signed deal. Next week, a team of European commissioners, led by José Manuel Barroso, the Commission president, will go to Beijing to create a new EU-China “High Level Mechanism”, modelled on an American version two years earlier, to try to smooth out the many sources of friction in the trading relationship. It comes as the China-bashing chorus among Europe’s manufacturers has been growing, rivalling even the practised critics in the US Congress. Last week the European Parliament voted to urge European leaders to boycott the Olympics opening.
The new trade talking shop is something, as a gesture, but it won’t count for much without concessions on the Chinese side and a reining-in of the protectionist instincts on the European side. On joining the World Trade Organisation in 2001, China agreed to cut many of its tariffs and put into place legal protection for foreign companies entering its markets. Despite its delight at being part of the club, its reforms have slowed down since entry, causing huge frustration in Europe and the US.
But the China critics overstate their case, portraying it as a nation bent only on its own development, regardless of other interests. On the contrary, after seven years of membership, it is well aware of the huge value of being part of the WTO. Its leaders know that their future depends on being able to fulfil at least some of the soaring expectations of their people, and that this is impossible to do if the country is isolated from the world economy.
Mandelson is right to probe this prickly ambivalence, to see if more might be extracted from China’s desire to stage a glorious edition of the Olympics. He is also right that to humiliate China would defeat that goal.
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