As the United States, under President Donald Trump, retreats from the global stage, the spotlight at the recent G20 summit in Hamburg was on Europe and China as standard-bearers of the multilateral, rules-based system.

It’s all very well to make the headlines. But can a self-confident Europe and an equally self-assured China work together in this age of uncertainty and unpredictability?

Can Europe and China consolidate their bilateral relationship while also working together on crucial questions of global governance — maintaining an open world economy — climate change, security, development?

In other words, are China and Europe going to be true strategic partners, or will they continue to be entangled in an under-performing transactional relationship?

For some time now, EU-China relations have been bit of a roller-coaster ride, marked by moments of euphoria followed by troughs of acrimony, discord and misunderstandings.

In a world of constant flux both Europe and China — and the wider world — would greatly benefit if their ties were made more robust and resilient.

Both China and Europe are on the road to better mutual understanding and have made many promises to work with each other on both the bilateral and multilateral levels.

Much more needs to be done by both sides, however, to make this a more dynamic and rewarding strategic relationship — and to translate good intentions and declarations into actions.

Both China and Europe have come a long way in the last four decades and they are still changing and growing. Theirs used to be a relationship between a developed power and a developing country. The EU was eager to teach and China was eager to learn. Today, although the EU may still want to teach, the focus is very much on the sharing of knowledge, know-how and experience between equal partners.

Trade and business continue to be at the core of EU-China relations but the relationship is expanding. The EU-China Strategic Agenda for Cooperation adopted in 2013 lists an array of areas including peace and stability, prosperity, innovation, urbanisation, where China and Europe can and want to work together.

There are over 70 sectoral dialogues, which show just how diverse and comprehensive this relationship is. There are also high-level dialogues on economic relations, strategic questions and people to people ties.

China’s impressive Belt and Road Initiative (BRI) has added a new element and new avenues for cooperation. With this initiative and the creation of the Asian Infrastructure Investment Bank (AIIB) China has shown it really wants to play its role as a “responsible stakeholder” — as the West has been urging over the last decade.

Brussels and Beijing are negotiating a wide-ranging bilateral investment treaty to promote and protect each other’s’ growing investments. The EU-China Connectivity Platform was established in 2015 to create synergies between EU policies and projects and the BRI. The EU-China innovation dialogue is full of potential.

At the 19th EU-China summit held in Brussels last month, Premier Li Keqiang and EU leaders made important statements upholding their commitment to combating climate change and a liberal global trading system.

This is of course very impressive. Although their connections are getting stronger, EU-China are still too often dangerously jolted by periodic disagreements and acrimony. There is a long way to go before EU-China ties become truly strategic and before both sides really use the window of opportunity offered now by what we call the “Trump Effect” to make their bonds stronger.

There are some important areas of friction. China wants the EU to give it market economy status as written in Article 15 of its accession protocol to the World Trade Organisation.

Beijing wants to negotiate a free trade agreement with the EU, on the lines of the deal just done with Japan or the one planned with Asean countries — and is unhappy with the EU’s insistence that the priority for the moment is to negotiate the bilateral investment treaty.

EU policymakers and business leaders worry about trade and investment barriers in China and insist on a further opening up of China’s markets as regards exports, services and investments. The EU’s focus, meanwhile, is on fair trade, reciprocity, and a possible screening of foreign investments.

It is unfortunate that these issues should cast such a big shadow over a multi-faceted and promising relationship. After all EU-China trade is booming and investment flows are buoyant. But because of these questions the 19th EU-China summit did not result in a joint statement, the second year in a row that this has happened.

If Europe-China relations are to fulfil their full potential, both sides need to have a radical rethink of how to work with each other.

First, both Europe and China should take a fresh and realistic look at each other, including at each other’s strengths and fragilities and sensitivities, political pressures and public opinion. This means looking at each other directly, not through the indirect lens often provided by the US. There is a difference in mind sets.

Second, the focus should be on making the relationship truly strategic rather than allowing it to remain transactional. This means looking at the bigger picture and not getting obsessed with details; looking at the longer term, not just at urgent questions.

Third, both sides must ensure a constructive management of differences — and also a constructive management of expectations. This will ensure being able to deal with inevitable trade disputes.

These key steps can help reinforce an important relationship, which is important for both China and Europe but also has a global impact.

—The writer is Dawn’s correspondent in Brussels

Published in Dawn, July 15th, 2017

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