China, EU say they’ll join forces to update trade rules

BEIJING — China and the European Union agreed Monday to launch a group that will work to update global trade rules to address technology policy, subsidies and other emerging irritants and preserve support for trade amid U.S. threats of import controls.

Actions such as President Donald Trump’s unilateral tariff hikes in a technology dispute with Beijing show World Trade Organization rules need to keep pace, said Jyrki Katainen, an EU vice president.

Mr. Katainen said Europe was not siding with Beijing in its dispute with Mr. Trump but was taking action to protect the global system of regulating free trade. He said the EU wants other governments to join the WTO group.

Companies worry the U.S.-Chinese dispute could chill global trade and economic growth if other governments respond by raising their import barriers. Even before Mr. Trump took office, economists were warning that countries were tightening import restrictions and taking steps to favor their companies over foreign rivals.

U.S. officials complain the WTO, the Geneva-based arbiter of trade rules, requires an overhaul because it is bureaucratic, rigid and slow to adaptto changing conditions.

Mr. Katainen said Europe wants to focus on issues including subsidies to industry, government pressure on foreign companies to hand over technology, and the status of state-owned industry — areas in which Beijing faces complaintsby Mr. Trump.

“I don’t expect these negotiations to be easy,” Mr. Katainen said. But if nothing is done, “the environment for multilateral trade will vanish.”