With President Donald Trump shaking the world trade order, the European Union is working with China to ensure that multilateral trade doesn’t come to an abrupt end.
European and Chinese officials are taking steps to strengthen their trade ties, but based on a multilateral approach — a system by which international trade has evolved over the past few years.
However, making trade accords with multiple countries is something that Trump opposes on the basis that it has had a negative economic impact on the U.S.
“I feel really we are making progress… both China and the EU believes in multilateralism and a rules-based world order,” Jyrki Katainen, vice-president of the European Commission, told CNBC's Eunice Yoon on Monday.
Both countries launched negotiations for an investment agreement in 2013. According to Katainen, Brussels and Beijing are now taking “the first step forward” in those talks.
“We decided that, in a couple of weeks’ time, the EU and China will exchange market access offers on (the) investment agreement,” Katainen said, adding that this will be presented at a summit in the coming weeks.
Data from the EU shows that China is the bloc's biggest source of imports while also being its second-biggest export market. On average, both countries trade over 1 billion euros ($1.16 billion) a day.
“We concentrated on (a) multilateral trading system for obvious reasons and we agreed to start reforming the WTO (World Trade Organization),” Katainen said.
The European efforts to get closer to China are part of a wider initiative to ensure that international trade isn’t disrupted due to the U.S. administration’s new policy direction. Trump vowed to tackle the U.S. trade deficit when taking office last year. He decided the best way to do that is by imposing new tariffs on imported goods — however, this has upset many countries, including Europe and Canada, traditionally seen as U.S. allies.
In the latest trade row between Europe and the U.S., Trump threatened a new 20 percent duty on cars built in Europe and sold in the U.S.