The Current Status and Prospects of the ‘Strategic Partnership’ between the EU and China: Towards the Conclusion of a Partnership and Cooperation Agreement

• Author: Antoine Sautenet
• DOI: http://doi.org/10.1111/j.1468-0386.2007.00395.x
• Published date: 01 November 2007
• Date: 01 November 2007

The Current Status and Prospects of the

‘Strategic Partnership’ between the EU and

China: Towards the Conclusion of a

Partnership and Cooperation Agreement

Antoine Sautenet*

Abstract: This article aims to evaluate legal aspects of the content and implementation of

the ‘strategic partnership’ between the EU and the People’s Republic of China. In the

absence of a category of ‘emerging countries’ in international economic law, the Union

must adapt its foreign policy with regard to this major economic and commercial power.

Relations between the European Community and China are currently governed by a

second-generation agreement from 1985. However, a new dynamic has been set in motion

since 2003, by the drawing up of preparatory documents by both parties and joint decla-

rations at annual summits bearing on the ‘strategic partnership’. Seen in a long-term

perspective, this partnership helps provide a measure of predictability in relations between

the two partners, through combining elements of ‘soft law’ and ‘hard law’. If the insertion

of political dialogue into the strategic partnership seems to alter the coherence of the

Union, notably with regard to the diff‌iculties of implementing the dialogue on human

rights, the added value of the partnership lies essentially in its economic and commercial

aspects, through not only the putting into place of non-binding ‘economic dialogues’ which

cover a large spectrum of the relationship, but also by the multiplication of sector-based

accords in numerous areas (maritime transport, customs cooperation, etc.). This constant

development has thus allowed parties, at the last annual summit, to envisage the conclusion

of a new framework agreement: this is the origin of the mandate given to the Commission

in December 2005 to conclude a partnership and cooperation agreement. This article will

sketch out a forecast of the legal framework, measured against the yardsticks of Asiatic

regional reconf‌igurations and the law of the World Trade Organisation (WTO). The

commercial risks of the relationship could imply the integration of the domains known as

‘WTO plus’ into the future agreement, notably in the f‌ield of investments and intellectual

property rights, which would introduce a greater variety into the agreement. That being

the case, the negotiations risk being equally fragile at the political level, in particular

concerning the insertion of a clause of democratic conditionality in the future agreement.

* Attaché temporaire d’enseignement (ATER), Université de Rennes I, antoinesautenet@yahoo.fr. I would

like to thank Professor Francis Snyder, Professor Joël Lebullenger and Mr Paolo Farah for their valuable

insights and comments.

European Law Journal, Vol. 13, No. 6, November 2007, pp. 699–731.

© 2007 The Author

Journal compilation © 2007 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford, OX4 2DQ, UK

and 350 Main Street, Malden, MA 02148, USA

Also, any clash between the values and the interests of the EU would be uncomfortably

highlighted during negotiations.

I Introduction

Father Jean-Baptiste du Halde, whose encyclopaedia on China was to inf‌luence the

favourable commentaries of Voltaire, noted in 1735 that the commerce of the f‌lour-

ishing Chinese Empire was incomparably superior to that of Europe.1Seen through

a long-term perspective, China is on track to renew its pre-colonial history, and

gradually to regain the place which it held before 1800, when it was one of the

powerhouses of the world economy and the premier manufacturing power on the

planet.2Today we see not so much an ‘emergence’ of China as a f‌irst-rank economic

player on the international scene, but rather a ‘retour au centre du monde’3in the

words of the geographer Pierre Gentelle. In fact, the process of economic liberalisa-

tion and political reform—started in 1978 by Deng Xiaoping and leading to the

accession of China to the World Trade Organisation in 20014—has led to the ‘re-

emergence’ of China as a major economic and commercial power. Thus, the People’s

Republic of China experienced an average growth of almost 91/2% in the period 1980–

2005,5becoming in 2006 the fourth economic power after the EU (seen as an inte-

grated economic region), the USA and Japan.6Thanks to these reforms and to the

growth which they engendered, China saw its gross domestic product (GDP) per

person grow from US$148 in 1978 to US$1,700 in 2005,7which led to—despite

growing social inequalities, particularly in the countryside8—the emergence of a

middle class of around 250 million consumers. This growth in power has been par-

ticularly evident in the recent period, since real GDP has grown by 9% per annum

between 1998 and 2005. Since 2001, this growth has rested essentially on manufac-

turing and commercial power integrated into the world trading system, and is

founded principally upon exports and investments. Thus, China has become the third

1J. B. Du Halde, Description géographique, historique, chronologique, politique et physique de l’empire de la

Chine (Lemercier, BNF, 1735).

2In 1800, China represented 40% of the world’s gross national product.

3Return to the centre of the world; P. Gentelle, ‘Géo-histoire: de l’an mil à l’an 2000, un centre bousculé

entre le continent et la mer’, in M. Foucher (ed.), Asies nouvelles (Belin, 2002).

4Protocol on the Accession of the People’s Republic of China to the WTO—Decision of 10 November

2001 (WT/L/432, 11 December 2001).

5Organisation for Economic Cooperation and Development, Syntheses—Economic Study of China

(September 2005).

6H. Siebert, China—Understanding a New Global Economic Player, Kiel Working Paper No. 1278 (Kiel

Institute for World Economics, June 2006), at 3. China represents 4.7% of global GNP, with a GNP of

US$2.2 trillion (see Vienna Institute for International Economic Studies, Country Expertise: China,

available at http://www.wiiw.ac.at/e/china.html). For a global presentation of China as an economic and

political player, see. J. Lun, A Political and Economic Introduction to China, Research Paper 06/36

(Library House of Commons, 19 June 2006).

7National Off‌ice of Statistics (2005). Nevertheless, according to the authorities, the GNP per person was

still ranked 107th in the world in 2004 (see China Remains Largest Developing Country (20 December

2005), available at http://english.gov.cn/2005-12/20/content_132456.htm).

8The inequalities are in fact ‘deepened in that the distribution of revenue and jobs ends to favour urban and

coastal zones at the expense of the rural and less developed regions’. See Trade Policy Review Mechanism

of the WTO (TPRM), People’s Republic of China, Report of the Secretariat (WT/TPR/S/161,

28 February 2006), Economic Environment, General Survey, point 1.

European Law Journal Volume 13

© 2007 The Author

700 Journal compilation © 2007 Blackwell Publishing Ltd.

largest global exporter9and one of the principal destinations for foreign direct invest-

ment, a large part of which went into manufacturing industry, centred on exports.10

The rapid growth of China is linked to a unique combination of factors, notably a

plentiful supply of inexpensive labour, the low prices of abundant natural resources,

the catalyst effect of accession to the World Trade Organisation (WTO) on the

domestic reforms concerning direct investment abroad, and export-centred growth. If

one considers trade between the EU and China, it has grown by 70%, reaching €210

billion and representing 9.4% of the entire external trade of the Union.11 Nonetheless,

trade between the EU and China is substantially out of balance, with Chinese exports

to the EU of €158 billion and EU exports to China of €52 billion, a trade def‌icit of

€106 billion.

Having regard to all of these considerations, including at the political and social

levels, China remains a developing country,12 although it can to a large extent be

considered as coming under the category of ‘emerging countries’ in economic terms.

However, this category—‘emerging countries’—does not exist in international eco-

nomic law, which institutes an expedient, particularly at the level of international trade

negotiations, in the legal and economic treatment of the People’s Republic of China13

by the industrialised countries. In fact, there is no ‘upper category’ of developing

countries,14 in contrast to the category of ‘least developed’ countries:15 there is only a

single umbrella category of ‘developing countries’. International organisations use

different procedures to identify developing countries: the establishment of lists using

abstract criteria (whether a single criterion or a number of criteria), and the principle of

self-selection.16

With regard to the establishment of lists, although the notion of development

has been broadened to include different factors (social development,17 human

9The second largest global exporter if one includes Hong Kong. In 2005, the total amount of exported and

imported goods represented some 63.9% of GNP, compared to less than 10% in 1978. See ibid., point 2.

10 More than 50% of the external trade of China is conducted by enterprises with foreign participation which

have set up in China (General Administration of Customs of the People’s Republic of China, Statistics

2005, available at http://www.customs.gov.cn).

11 China was thus the second largest trading partner of the EU, after the USA (18.5 % of the external trade

of the Union).

12 The Human Development Indicator (HDI) is revealing in this regard, since China remains 85th in the

world with a HDI of 0.755 (above the HDI average of 0.718). One notes however that the progression of

the index has nonetheless been spectacular: from 0.525 in 1975 to 0.755 in 2005. See United Nations

Development Programme (UNDP), World Report on Human Development 2005 (Economica, 2005), at

236.

13 The categorisation of developing countries poses a problem, to the extent that a certain number of rights

are attached to this status by international organisations: system of aid and international cooperation

(Organisation for Economic Cooperation and Development, World Bank), application of specif‌ic pro-

visions to developing countries in the General Agreement on Tariffs and Trade texts, delays on imple-

mentation, application of special and differentiated treatment (WTO).

14 For an analysis of juridical transformations in international law arising from the demands of the Third

World, see P. Burette-Maurau, La participation du Tiers Monde à l’élaboration du droit international

(Bibliothèque de droit international, 1983) and G. De Lacharrière, ‘L’inf‌luence de l’inégalité de dével-

oppement des États en droit international’, (1973) 139(II) RCDAI 227.

15 A qualif‌ication which can be seen as a ‘categorisation by the lowest’.

16 See for a global analysis of methods for identifying developing countries, G. Feuer, Droit international du

développement (Dalloz, 2nd edn, 1991), at 66–74.

17 See Resolution 2542 (XXIV), entitled ‘Declaration on Social Progress and Development’ and the ‘World

Summit on Social Development’ (United Nations, March 1995).

November 2007 The Current Status and Prospects of the ‘Strategic Partnership’

© 2007 The Author 701

Journal compilation © 2007 Blackwell Publishing Ltd.