Tomorrow's Silk Road

TABLE OF CONTENTS

List of Figures

List of Tables

List of Abbreviations

Preface

Executive Summary

Introduction

Part I. The Global and Bilateral Context

1. Why an EU-China free trade area?

1.1 The context for a free trade area study

1.2 Is there a case for an EU-China FTA?

2. China and the EU in a rapidly changing world economy

2.1 Chinese weight as an EU trade partner: Anticipate 2030

2.2 Competitiveness and reforms in the EU and China

2.3 Comparing China and the EU’s trade strategies: Multilateral, plurilateral and bilateral

3. Bilateral economic relations: Trade and investments

4. Global value chains: Significance for the EU and China

Part II. Design and Substance of an EU-China FTA

5. What would an EU-China FTA look like?

6. Market access in industrial goods: An analysis of tariffs

6.1 Analysing bilateral trade and its sectoral composition

6.2 Industrial tariff profiles of the EU and China

6.3 Where China and the EU differ: Tariff peaks

7. Market access in goods: Trade defence remedies

7.1 Relevance of trade defence for an FTA

7.2 Recent bilateral application of trade defence

7.3 The 2017 revision of EU trade defence measures and the status of China

8. Market access in agriculture: Tariffs and tariff-rate quotas

8.1 Bilateral agro-food trade and its composition

8.2 Tariff and TRQ barriers in bilateral agro-food trade

8.3 Tariffs peaks in agro-food

8.4 Tough barriers: Tariff rate quotas

9. Technical barriers to trade

9.1 Mapping bilateral TBTs and their scope

9.2 TBTs between China and the EU: Empirical evidence at sector and product levels

9.3 Transforming China’s technical regulation, standards and conformity assessment

9.4 Some inferences about lowering TBTs in an EU-China FTA

10. Reducing SPS barriers in an EU-China FTA

10.1 Market access barriers of the Chinese SPS regime

10.2 Concerns from China and WTO partners about EU SPS barriers

10.3 Lowering SPS barriers in an EU-China FTA

11. Market access in services: China and the EU

11.1 Introduction

11.2 Measuring the extent of market access in services: China and the EU

11.3 Sectoral services market access: China and the EU

11.4 Potential value added of an EU-China FTA, based on prior experiences

12. Public procurement

12.1 China’s offers to accede to the WTO GPA

12.2 Barriers to EU public procurement as seen by Chinese investors in Europe

12.3 Possible directions for EU-China negotiations on public procurement

13. Intellectual property rights and geographical indications

13.1 Introduction

13.2 EU-China IP Dialogue

13.3 China’s IPR legislation and enforcement

13.4 IPR protection and enforcement measures in China’s FTAs

13.5 IPR protection and enforcement measures in EU FTAs

13.6 Geographical Indications

14. State-owned enterprises (SOEs) and competition policy

14.1 The SOE problem in China and early reforms

14.2 Reformed SOEs and barriers to market access

14.3 Can the EU and China reach an agreement on SOEs?

14.4 Competition policy

15. Investment and the Comprehensive Agreement on Investment

15.1 Why a CAI?

15.2 Why are the existing BITs insufficient?

15.3 Investment issues an EU-China CAI should address

15.4 EU approach to CAI

15.5 China’s approach to CAI

15.6 What’s next?

15.7 Policy options for an EU-China CAI: A review

15.8 Integrate CAI in FTA

Part III. Potential Economic Impact: A CGE-based simulation of effects of the FTA

16. Introduction

17. Trade and production linkages

17.1 Value added and trade linkages between China and EU

17.2 Trade in mass consumer goods

18. Removing tariffs and reducing NTM costs in a China-EU FTA

19. Modelling the FTA between China and the EU

19.1 A non-technical introduction of the model simulations

19.2 Simulating economic impacts of ambitious and modest FTAs

19.3 Results of the FTA simulation: Changes in GDP (in % and $)

19.4 Results of the FTA simulation: Changes in real wages for three skill groups

19.5 Results of the FTA simulation: Effects on trade

19.6 Strategies for adjustment to a China/EU FTA

Part IV. Conclusions and Policy Implications

20. Policy implications of an EU-China free trade agreement

References

Annex I. European TRQs

Annex II. Public Procurement in China and the EU

Annex III. Estimated Impacts of an FTA

Annex IV. Total AVEs for NTBs for Goods and Services

Annex V. Technical Overview for CGE Modelling