EU-China trade deal worth tens of billions – PM

Britain's trade delegation to China prepares to leave Heathrow. Picture: PA
Britain's trade delegation to China prepares to leave Heathrow. Picture: PA
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Prime Minister David Cameron has promised to throw his full political weight behind a free trade agreement between the European Union and China which he believes could be worth tens of billions of pounds a year.

Mr Cameron’s call came as he arrived in Beijing at the head of the largest British trade delegation ever to visit the far eastern country. The PM believes that eliminating tariffs in the 20 sectors where they are highest – vehicles, pharmaceuticals and electrical goods – could save UK exporters £600 million a year.

The European Commission is due to begin investment treaty negotiations with China early in the New Year to cut back some of the barriers to trade.

Mr Cameron was set to become the first EU leader to champion a full-scale free trade agreement, which Downing Street said could be worth £1.8 billion annually to the UK alone, in talks with premier Chinese Li Keqiang today. But the proposal is likely to face stiff resistance from some EU states who fear their markets would be flooded with cheap Chinese imports.

Writing in Chinese magazine Caixin, Mr Cameron declared his ambition to use this week’s visit to help forge “a partnership for growth and reform that can help to deliver the Chinese dream and long-term prosperity for Britain too”.

He welcomed signals from last month’s crucial Third Plenum of the ruling Communist Party that China is ready to open up further to the rest of the world under the leadership of President Xi Jinping, who took up office a year ago.

“Britain is uniquely placed to make the case for deepening the European Union’s trade and investment relationship with China,” said Mr Cameron.

“Building on the recent launch of EU-China negotiations on investment, and on China’s continued commitment to economic reform, I now want to set a new long-term goal of an ambitious and comprehensive EU-China Free Trade Agreement.

“And as I have on the EU-US deal, so I will put my full political weight behind such a deal which could be worth tens of billions of dollars every year.”

During the first day of his second trip to China as PM, Mr Cameron was due to attend the official opening of a new academy in Beijing for training technicians, salesmen and service staff for Jaguar Land Rover, who were signing a £4.5 billion agreement to provide 100,000 cars to the National Sales Company in China over the next year.

JLR chief executive Ralf Speth was among the 120-strong business delegation accompanying Mr Cameron, along with executives from major exporters Rolls-Royce, BP, Royal Dutch Shell, Barclays, HSBC, GlaxoSmithKline, Arup and Virgin.

The bulk of the delegation was made up of smaller businesses including Westaway Sausages of Devon, Moulton bicycles and the Cambridge Satchel Company, which Mr Cameron believes have considerable opportunities in the fast-expanding consumer markets of China.

English Premier League chief executive Richard Scudamore and other football representatives including West Ham United FC vice-chairwoman and The Apprentice star Karren Brady were also part of the delegation.

The Premier League is set to sign an agreement with the Chinese Super League to boost the profile of elite English football and boost participation in the sport in China.