Merkel, Li Hail Trade Ties as Trump Pursues Protectionism

  • German, Chinese leaders speak by phone amid concern over U.S.
  • Europe-China investment accord should be completed: Merkel, Li

German Chancellor Angela Merkel and Chinese Premier Li Keqiang spoke out in favor of closer trade ties, signaling a global alliance opposed to the protectionist agenda of U.S. President Donald Trump.

Li and Merkel talked by phone on Wednesday and addressed “bilateral and multilateral issues,” according to German government spokesman Steffen Seibert. He said that Li accepted the chancellor’s invitation to visit Germany for more comprehensive talks on economic and trade issues.

“The two spoke in favor of free trade and a stable world trade order,” Seibert said in a statement. He added that “the negotiations over a European-Chinese investment accord should come to a successful completion quickly.”

The call between the leaders of the world’s No. 1 and No. 3 exporters suggests global battle lines are being drawn over free trade just as Trump scraps a long-negotiated trade pact with Pacific nations and escalates protectionist rhetoric. A showdown may come in July this year, when Merkel hosts a summit of Group of 20 leaders in the port city of Hamburg, gateway to the world for German high-end goods from Siemens machinery to BASF chemicals and the entry point for more Chinese goods than anywhere else in Europe.

For more on Hamburg and its global trade ties, click here

Merkel, who is running for a fourth term in Germany’s election in September, has spoken about her concern over the threat of protectionism, while Chinese President Xi Jinping has likened it to “locking oneself in a dark room.”

“I liked that,” Merkel said in a speech in Wuerzburg, southern Germany, on Monday referring to Xi’s choice of words, which she lauded as “very memorable.’’

“And by the way we speak with China frequently about how conditions should be made the same for all -- it shows us at the very least that we should strive for openness,” she said.

That contrasts with Trump’s inauguration address last week, when he espoused an “America First” doctrine that included a pledge to “protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs.”

“Protection will lead to great prosperity and strength,” Trump said.

Chinese Anchor

In an opinion piece for Bloomberg Businessweek on Thursday, Li reinforced the message that China stood by the World Trade Organization and multilateral trade accords, calling the world’s most populous nation “an anchor of stability and growth” in the world order.

“It’s far preferable for countries to trade goods and services and bond through investment partnerships than to trade barbs and build barriers,” Li said.

In Germany, Merkel’s government has raised alarm bells over the shift to protectionism as a threat to the country’s export industry and the European economy.

“What’s coming from America and what we’re hearing from other countries is very, very dangerous for the world economy, also for us,” Vice Chancellor Sigmar Gabriel told lawmakers in Germany’s lower house, the Bundestag, on Thursday.

(Updates with G-20 starting in fourth paragraph.)
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