EU, China call for new global trade push

BRUSSELS (AP) – The European Union (EU) and China have called for global trade talks to finally strike a deal that could reverse falling demand and help pull their economies out of recession.

EU Trade Commissioner Catherine Ashton told reporters Friday that “trade and investment will lead us out of the current crisis” on the second day of economic talks with Chinese Vice Premier Wang Qishan.

Negotiations on a new pact to sweep away trade barriers started more than seven years ago and collapsed last year on US, Indian and Chinese refusal to accept a compromise deal.

Global trade is now in freefall as the massive demand of wealthy nations for imports that boosted the economies of China, Brazil and others has diminished drastically.

China, the world’s No. 3 economy, will be one of the few major nations to escape recession this year, although it will suffer from plunging exports to the US and the 27-nation EU - its largest export market.

Qishan said Thursday that China was committed to open trade, pressing the EU to ease restrictions on high-tech exports and take into account Chinese efforts to remove barriers that EU companies say hold them back from doing business in the world’s most populous nation.

China has not become more protectionist as a result of the economic crisis, EU trade official Mauro Petriccione told reporters Friday.

“We’re not seeing the kind of backsliding we see in the US or South America,” he said, adding that “the Chinese have exactly the same concern” that countries could block foreign imports as economic growth slows or declines.

He said China had soothed EU concerns about its massive economic stimulus program. Europe fears the program could boost state subsidies to businesses and shut foreigners out of government tenders.

“We received assurances that the Chinese will keep their stimulus package fair, open and transparent,” Petriccione said — adding that whether that will happen could be “a totally different story.”

The EU itself is a target of criticism for the size of its economic stimulus. US officials and others have called on Europe, particularly Germany, to spend more to boost demand. EU governments resist this, saying they are spending billions extra on welfare payments to a rising number of unemployed which will cause public debt and deficits to balloon in the years ahead.