EU, China Summit Ends With No Agreement on Trade --Update

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The European Union and China failed to resolve some sharp differences on trade at a leaders' summit on Friday, with disagreements on steel overcapacity continuing to tarnish relations.

The trade differences undercut what was supposed to be a joint show of force in defense of international rules and agreements following U.S. President Donald Trump's decision on Thursday to pull out of the Paris climate accord.

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European Council President Donald Tusk said both sides agreed the U.S. decision on the Paris deal was "a big mistake." Chinese Premier Li Keqiang didn't directly raise the issue but said China's partnership with the EU was "useful to counter the uncertainties in the world."

However differences over trade pushed the summit well past its scheduled finishing time. In the end, the two sides were unable to agree on a planned joint statement because they couldn't agree the trade language.

Over the past few years, the EU has slapped anti-dumping duties on a range of Chinese steel exports, heightening a growing conflict in which each side accuses the other of unfair trade practices.

The EU's moves come amid a global steel glut. Major producers, including China, are trying to sell their products at low prices, undercutting European firms. China claims the EU measures breach World Trade Organization rules.

In a press conference that officials acknowledged was long delayed by differences over the trade language in a joint EU-China statement, European Commission President Jean-Claude Juncker said the discussions had narrowed differences on steel overcapacity.

"But we are not yet there," he said.

Mr. Li said it was important the EU abided by its obligations to give China market economy status, which would impact Europe's ability to apply antidumping tariffs.

"This will send a signal to the society and the market that we both abide by international rules and uphold multilateralism," he said.

However, he signaled some flexibility on the Chinese side, saying "if there are problems with the rules themselves, the parties can work together to improve the rules."

China filed challenges at the WTO in December against the EU and the U.S., charging its Western trading partners with breaching the pact's rules by levying antidumping measures that don't apply to China. A grace period for China, which enabled European and American authorities to level measures applicable to countries that aren't market economies, expired 15 years after it joined the WTO in 2001.

The EU is revising its antidumping measures, partially in an effort to overcome the Chinese challenge, by nixing its market-economy designations in favor of an approach focused on market distortion.

Mr. Li arrived in Brussels Thursday night from Berlin and held an informal dinner with EU leaders. The summit took place on Friday.

Among other issues the two sides discussed were the tensions over North Korea's nuclear program.

Mr. Tusk said the EU and China share a common interest in the de-escalation of tensions in the Korean Peninsula and called for North Korea to end its nuclear and ballistic missile tests.

"We count on China's continued support to achieve these objectives," he said.

The Trump administration has been pressing China to increase the economic pressure on its ally over the tests, including by tightening control of business between Chinese companies and North Korea.

Mr. Li said China was "vigorously" implementing United Nations Security Council resolutions imposing sanctions on North Korea. He said if there is backing for new sanctions at the Security Council, where China wields a veto, China "will act accordingly."

"Ultimately the issue will be resolved through dialogue and negotiations, " he said.

Write to Laurence Norman at and Emre Peker at

Disputes over trade between China and the European Union forced the two to abandon a planned statement on their commitment to the Paris climate accord Friday, one day after President Donald Trump withdrew the U.S. from the global agreement.

The failure raises questions about Beijing's ability to fill a leadership gap on global environmental policy left by the U.S., as many observers have predicted it might.

With the U.S. role in doubt for months, European leaders have turned to Beijing to take the reins from Washington in climate negotiations. EU and Chinese officials drafted a joint statement this week proclaiming their "highest political commitment" to the Paris agreement and vowing cooperation.

Their failure to deliver the statement offers a reminder of the limits facing world leaders who look to China to carry the torch for globalist policies opposed by Mr. Trump and his ethos of economic nationalism.

Chinese Premier Li Keqiang said at a news conference his country's partnership with the EU "is useful to counter the uncertainties in the world."

European Council President Donald Tusk said both sides agreed the U.S. decision was "a big mistake."

The leaders spoke after a summit that had been planned to focus on trade and foreign policy issues but was overshadowed by Mr. Trump's decision Thursday, which drew broad international criticism.

Chinese President Xi Jinping in January delivered a speech at the World Economic Forum in Davos, Switzerland, in which he essentially laid claim to China's role as world leader on free trade. Some observers had expected Mr. Li to seize the moment in Brussels to assert China's leadership on the environment. China, the world's largest emitter of greenhouse gasses, is investing heavily in clean-energy technologies.

In a sign of politicians' search for leadership, French President Emmanuel Macron was due to meet Friday evening with former New York City mayor and billionaire philanthropist Michael Bloomberg, who also serves as a U.N. envoy on climate, to discuss the Trump administration's decision.

China's size and newfound determination to tackle climate change have made it the logical heir to the U.S. leadership role, diplomats and officials say. But some officials from wealthier nations fear that Beijing's emergence without the U.S. could upset the delicate balance in the Paris climate deal between developed and developing nations.

The divide between the two groups of nations has persisted through years of climate talks. The U.S. and Europe have pushed the biggest developing nations, led by China and India, to accept some form of restraint on their emissions. Those nations have pushed back by arguing that the lion's share of the burden must be shouldered wealthy nations, which have produced the bulk of historical emissions.

The Paris accord produced an uneasy truce between the two camps: Developing nations would work to limit their emissions, while wealthy nations would mobilize financing to help developing nations shift to renewable energy and build infrastructure to protect themselves from the effects of climate change.

Negotiations, however, are ongoing over how to implement the accord.

Financial support by developed nations to poorer countries of up to $100 billion annually by 2020 was a major element of the Paris accord, and it remains unclear how the pact's champions will fill the gap after a U.S. withdrawal. Major supporters of the climate deal like the EU and China are reviewing and will discuss the issue, European Commissioner for Climate Action and Energy Miguel Arias Canete said Friday after meeting with his Chinese counterpart in Brussels.

"It is possible that this creates the push to get better financing on climate change," an EU official said of Mr. Trump's decision to pull the U.S. out of the Paris agreement. "Discussions started in Marrakesh in November, when Trump was elected and it became clear that he was not going to pursue the climate agreement."

"This fight around the division between developing and developed countries hasn't been put to rest," said one European diplomat involved in the talks.

In one dispute, wealthy nations are seeking strong transparency rules, to ensure that China and other developing nations report their emissions properly.

"It would definitely have been better with the U.S. at the table," the diplomat said, "because the Chinese and many other developing countries are not at the same place about what type of transparency regime should be in place because of the Paris agreement."

While Friday's trade differences were unrelated to climate issues, they hammer home the tensions China has sparked, in another sphere depending on global rules, by deploying what Europe and the U.S. have called unfair trade practices. The European Commission president on Friday warned Chinese Premier Li Keqiang that failure to tackle these issues could fuel populist movements in the region that staunchly oppose globalization and free trade.

China has said it is the EU and the U.S. that are breaching World Trade Organization rules by slapping large duties on some cheap Chinese steel exports.

--Emre Peker in Brussels contributed to this article.

Write to Laurence Norman at and Emre Peker at

(END) Dow Jones Newswires

June 02, 2017 14:10 ET (18:10 GMT)