The major deal between Beijing and Brussels aims at boosting bilateral trade between the two powers amid protests from the Trump administration, who has urged to form a "coordinated" transatlantic policy with its European allies in a bid to block China in Washington's trade war.

An agreement between the European Union and China was signed on Monday to preserve geographical indications (GI), reports revealed.

Chinese minister of commerce, Zhong Shan, German envoy to China, Ge Ce, and EU envoy to China Yu Bai signed the agreement, the report said, adding the agreement aims to boost the list up to 175 products from each side in four years.

GIs label product origins and their reputation and qualities, protecting such goods from third parties and their products failing to meet regional standards or imitating them, the World Intellectual Property Organisation notes.

“The EU-China GI agreement is a landmark treaty between the European Union and the People’s Republic of China. It is a concrete example of cooperation between two parties and reflects openness and adherence to international rules as a basis for trade relations,” an EU statement read.

According to the report, cooperation began in 2006 and led to 10 GIs from both sides being added to a list in 2012, with talks concluding in 2019 and the deal set to enter force in 2021.

“I am proud to see this agreement getting one step closer to its entry into force, reflecting our commitment to work closely with our global trading partners such as China,” Janusz Wojciechowski, EU agriculture and rural development commissioner, said in a statement.

The GI agreement would also help to protect authenticity and preserve the reputation of European goods as well as strengthen EU trade with China, he added.

According to EU figures, China was the third-largest destination for EU agricultural goods at 117bn yuan (€14.5bn) and was the second-largest destination for European GI-protected products.

“Cooperation between EU and China in new areas are expanding, such as digitalization and high-end service industries, though European companies were complaining about the Chinese market, such as market access, level playing field, [labour] rights protection, etc.,” Wang Yiwei, director of the Institute of International Affairs at Renmin University, said in a statement.

The agreement could also help both sides explore more trade and investment potential between China and Europe and also promotes globalization, he concluded.

The news follows the 22nd EU-China summit on 22 June on Brussels, where European Council president Charles Michel, German chancellor Angela Merkel and European Commission president Ursula von der Leyen met Chinese president Xi Jinping. 

"We strive for a relationship that delivers on our mutual commitments. That generates concrete results for both sides. Results that are also good for the world. In some areas, we are on the right track. In others, more work needs to be done,"
President Michel said at the event.

To date, an agreement on EU-China investment has become central to the EU's relations with China, with the two sides entering talks in 2013 to boost investment for firms from the two economic powers, transparency as well as expediting licensing procedures, among others. Concerns such as the environment, trade and human rights were also discussed.

But pressure from the United States has demanded the EU to implement "action-oriented" dialogue on Beijing, US deputy secretary of state Stephen Biegun said in a Senate Foreign Relations Committee testimony in July

He added the EU and US shared "democratic ideals" and talks should lead to "more coordinated policy outcomes that will advance our shared interests", citing engagement with allies in the G7, G20 and North Atlantic Treaty Organisation (NATO).

WTO Sides With China in Tariff Row With US

Washington initiated a trade war with China back in 2018 by introducing hefty tariffs on several groups of Chinese goods over Beijing's alleged abuse of the existing trade agreements between the two countries at the expense of the United States. The World Trade Organisation has ruled that the US violated the trade rules of the organisation by introducing high tariffs against Chinese goods as a part of its trade war against the Asian country. The organisation demanded that the US bring its tariffs into conformity with the country's obligations as a member of the WTO.

The WTO's ruling clarified that not only do Washington's actions go against the regulations set forth by the global trade body, but that the US had also failed to properly justify the economic measures imposed against Beijing, as required by the WTO charter. The global trade body's ruling further stressed that the US had failed to utilise the Dispute Settlement mechanism to resolve the issues that had arisen in the trade relations with China, as it was supposed to.

"Recalling Article 3.7 of the DSU that highlights that the aim of the dispute settlement system is to achieve a positive solution to a dispute, the Panel expresses its ongoing encouragement to the parties to pursue further efforts to achieve a mutually satisfactory solution [to their conflict]", the ruling says.

In the wake of the WTO ruling's publication, Beijing has expressed hope that the US will respect its recommendations and return to compliance with the global body's regulations.

US-China Trade Tensions
In the past, US President Donald Trump has repeatedly accused the WTO of treating the United States "unfairly" in its dispute resolving mechanisms. Washington theoretically has the power to challenge the WTO's ruling on tariffs against China, which enables Beijing to legally respond in the form of imposing tariffs against American goods. But in practice, the US has no chance of seeing the appeal process be completed because of its own past actions that have left the WTO's appeals court defunct due to a lack of Washington-approved judges.

The trade war between the two countries started back in 2018 at the initiative of Washington, which accused Beijing of abusing the existing trade agreements to profiteer at the US’ expense and introduced hefty tariffs on Chinese steel and aluminium. The list of affected goods has only expanded since, including some $200 billion worth of Chinese imports by 2020.

Beijing has strongly denied Washington's allegations and has consistently introduced tariffs on the imports of American goods of an equivalent value in response. The sides signed the so-called Phase One agreement in 2019, which was supposed to become a first step towards normalising the two countries' trade relations, but ties between the two deteriorated once again after President Trump accused China of being responsible for starting the global coronavirus pandemic - another allegation denied by Beijing.