EU and Brazil Frustrated Over US-China Trade Agreement

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] As the United States and China reached a trade agreement after more than two years, voices of dissatisfaction have erupted from neighboring countries such as Europe and Brazil.

The concern arises because China has agreed to purchase an additional $200 billion (approximately 232 trillion KRW) worth of U.S. goods over the next two years in sectors including agricultural products, industrial goods, services, and energy, which raises worries that imports from other trading partners may decrease accordingly.

Oerg Utke, Chairman of the EU Chamber of Commerce in China, criticized, "China's large-scale purchase commitment is like 'managed trade' where the U.S. tells China what to buy," adding, "European companies are now in a position where they do not know where to establish themselves."

Utke further stated, "According to this agreement, China may buy less Brazilian soybeans, Australian and Qatari crude oil, Indian iron ore, and European aircraft, which is a 'market distortion,'" criticizing the deal.

He described China's promise to apply commitments such as intellectual property protection, prohibition of forced technology transfer, and financial market opening to other trading partners as "very encouraging," but pointed out, "We need to observe how this will be implemented over the next year, and it will not be easy for both the U.S. and China."

Chinese Vice Premier Liu He stated at the signing ceremony, "This agreement will not harm other countries," but concerns from neighboring countries do not seem to subside easily.

Former EU Trade Commissioner Cecilia Malmstr?m also tweeted, "'Managed trade' does not comply with multilateral norms and is not good for the economy."

On the 15th, when the first phase of the U.S.-China trade agreement was reached, Phil Hogan, EU Commissioner for Trade, who was visiting the U.S., also expressed discomfort.

Commissioner Hogan said, "The devil is in the details," and pointed out, "The specifics of the U.S.-China trade agreement are incomplete, and we need to examine whether it complies with the rules of the World Trade Organization (WTO)."

He also noted that the "structural reforms" that the U.S. and EU have demanded from China so far were not addressed in the agreement and said he would watch what will be covered in the second phase of negotiations.

Brazil, whose main exports to China are agricultural products and energy, is also concerned that it might suffer damage from the U.S.-China trade agreement.

About 80% of Brazil's exports to China consist of agricultural products and energy, including soybeans, meat, iron ore, and crude oil.

Moreover, China diversified its agricultural purchases to countries like Brazil over the past two years in response to the trade war initiated by the U.S., but if it intends to honor this trade agreement, it will have to significantly reduce such purchases again.

Mauricio Santoro, a Brazilian trade expert, said, "The trade negotiations between China and the U.S. have caused concerns in Brazil's agricultural sector throughout last year," adding, "The U.S.-China trade agreement will inevitably have a negative impact on Brazil's agricultural exports in some form."

This content was produced with the assistance of AI translation services.