MercoPress. South Atlantic News Agency

EU warns China about “deeply unequal” trade relationship

The European Union trade relationship with China is “deeply unequal” said EU Trade Commissioner Peter Mandelson stressing that the EU sells more goods to Switzerland than to China.

In a frank letter to the European Commission president, part of its content revealed by the BBC, Mandelson suggest that China took business in Europe for granted. China has become the EU biggest source of manufactured goods. But Mr Mandelson said that tariff barriers and Chinese interventions were limiting how much the EU sold to the Asian giant, "costing firms billions". The letter added that the Chinese were "procedurally obstructive" where dialogue had been set up. The EU sold more goods to Switzerland than it did to China, the letter to Jose Manuel Barroso said, adding that the trade deficit between the EU and China was growing at about 14 million Euros every hour. "The Chinese juggernaut is, to some extent, out of control" Mr Mandelson underlined. According to the BBC Mr Mandelson "effectively accuses China of taking the mickey" and "the message behind the letter looks pretty clear: that Europe has rolled over long enough". Mandelson also admitted that pressure from the public and politicians for a level playing-field of trade was growing. "If we want to sustain a policy of openness towards China politically, we have to make sure that the public is satisfied that that trading relationship is being conducted on full and fair trade, otherwise we are going to be in trouble." China was "shifting the economic and diplomatic scenery so fast that it is almost impossible for policy makers to keep up let alone be ahead of the game" added Mandelson. "Because of China's extraordinary economic growth as well as its political and diplomatic reach, and the effect it can have on global security, we are seeing China hanging the whole global landscape in so many different ways". Mnadelson's statements follow on last week's meeting of EU Finance ministers in Luxembourg to consider the growing frustration in Europe with the Euro-Yuan exchange rate not only because of Beijing's ever-increasing trade surplus with Europe, but also because the US dollar's decline means the Euro is bearing the brunt of China's reluctance to allow an appreciation of its currency. "China and other emerging nation economies should introduce more flexibility in their exchange rate management. This is good for China's growth" Joaquín Almunia, the EU monetary affairs commissioner was quoted in Luxembourg. "First point China, second point dollar, third point yen," said Jean-Claude Juncker, chairman of the Euro-zone finance ministers' group. Following the ministerial meeting it was announced that Mr Almunia, Mr Juncker and Jean-Claude Trichet, the European Central Bank president, would travel to China before the end of the year for high-level discussions on exchange rates and other issues