EU Turns Blind Eye to Berlin-Beijing Nuclear Deal

German Chancellor Gerhard Schröder is facing tough questioning at home over his recent trip to China.

On Monday, protest was growing among the Greens, the chancellor’s junior coalition partner, over Schröder’s controversial calls in Beijing for the ending of an EU arms embargo and his support for Beijing’s "One China" policy. Many Green party members believe that China’s human rights violations and its reputation as the world’s biggest buyer of foreign arms do not justify the chancellor’s lenient stance.

"That the chancellor isn't in a coalition with himself, but with the Greens, that needs to come out at some point," party leader Reinhardt Bütikofer told the German TV channel ZDF.

The chancellor’s (photo) Green allies are also irked over his promise to the Chinese government to sell Beijing a plutonium processing plant near Frankfurt for an estimated €50 million.

Though Schröder says Beijing has assured him the plant will not produce material for military purposes, critics say it would be hypocritical of Germany to sell nuclear equipment abroad while phasing out nuclear power at home. The row now threatens to split the ruling coalition, as reports abound about a fallout between the chancellor and his popular Green foreign minister, Joschka Fischer, as well as rising criticism among Schröder’s own Social Democrat ranks.

Brussels silent over Schröder’s decision

But even as the controversy gathers pace in Germany, criticism remains muted in Brussels. The pointed silence of the EU isn’t without reason: the chancellor’s recent overtures to Beijing are considered to be routine policy within the EU.

The EU froze relations with Beijing in 1989 in the wake of the bloody suppression of student revolts by the Communist Party at the Tiananmen Square and imposed a number of economic and arms sanctions. But EU-China relations showed signs of thaw a few years later, though arms sanctions remain in place.

In 1994, Beijing and Brussels resumed bilateral political dialogue by agreeing to regular high-level ministerial meetings and drafted a strategy paper pinpointing areas of trade cooperation.

Trade concerns dominate EU-China relations

Since then trade has remained the defining factor in the growing relationship between China and the European Union.

China is now the EU’s third-largest non-European trading partner after the U.S. with bilateral trade amounting to €115 million in 2002. The EU is China’s second-largest export market and European companies have invested heavily in China.

In recent years, Brussels and Beijing have also cooperated in areas such as industrial policy and science and technology. At the recent EU-China summit in October, the two sides signed a €200 million deal for Beijing to take a stake in Europe’s Galileo satellite navigation system as well as agreements that will pave the way for Chinese tour groups to visit EU states and establish closer ties between the two nations’ car industries.

EU easing stance over China arms embargo?

However the issue of the EU’s arms embargo remains the main sticking point between Brussels and Beijing.

China has repeatedly pushed for the lifting of the EU embargo, a request that the bloc has turned down until now. However Brussels is reported to have softened its stance over the 1989 arms sanctions recently. At the bilateral summit in Beijing in October this year, EU Commission President Romano Prodi said that despite resistance in certain EU countries, Brussels was working towards easing arms restrictions.

France has already called for a lifting of the arms embargo, a view that was echoed by German Chancellor Schröder this month as well as EU trade commissioner Pascal Lamy, who said the bloc was prepared to review its ban on arm sales to China.

EU states’ make nuclear deals with Beijing

The issue of the EU arms embargo is also linked to Brussels’ efforts to hammer out an agreement over the cooperation of nuclear power projects with China.

At the October China-EU summit, the two sides said they hoped negotiations between Beijing and the European Atomic Energy Community (EURATOM) on cooperation in peaceful utilization of nuclear energy and nuclear safety would soon make progress and lead to the framing of a treaty.

But even in the absence of a formal treaty, European countries, in particular France, have been increasingly cooperating with the Chinese over nuclear projects. The French are already involved in the construction of several nuclear reactors in China and have signed agreements with Beijing covering nuclear engineering, production, reactor fuel and experimental reactors.

Lifting of arms embargo too "premature"

Considering the exchange of nuclear technology and know-how between the EU and China, Brussels is expected to turn a blind eye to Schröder’s plans to sell a plutonium plant to Beijing.

Technically, the EU is also believed to have its hands tied in the case because the export of nuclear reactors to China that are meant for civilian use is still allowed in the EU. Only those that are meant to serve military needs are banned under the arms sanctions.

But whether the EU arms embargo on China will actually be lifted is still unclear. France is using all its diplomatic channels to convince the rest of Europe that easing arms restrictions against Beijing is a good idea. Although supported by heavyweights Germany, Italy and Britain, Paris still faces strong opposition from Denmark and Sweden.

The European Commission – the EU’s executive arm – said this month that talk of lifting the embargo was premature. "There has been a feeling that the Chinese would need to demonstrate very clearly the progress made in human rights before a lifting of the arms embargo can be considered," Emma Udwin, a spokeswoman for EU External Relations Commissioner Chris Patten, told reporters. "Obviously it takes more than one member state to shift this."