Europe Threatens Legal Challenge to U.S.-China Trade Pact at WTO

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The European Union said the preliminary U.S.-China trade agreement could violate World Trade Organization rules and held out the prospect of a legal challenge.

EU Trade Commissioner Phil Hogan said his team will scrutinize whether China's pledge to increase purchases of U.S. goods and services by at least $200 billion over the next two years is WTO-compatible. The commitment is included in a first-phase accord signed with fanfare on Wednesday by the U.S. and China.

"We haven't analyzed the document in detail, but we will and if there's a WTO-compliance issue of course we will take the case," Hogan told a conference on Thursday in Washington. "We're not trigger-happy about taking cases to the WTO -- we don't want to create that impression. But we'll stand up for our own economic interests."

The comments signal that any easing of U.S. tensions with China could have knock on effects for the rest of the world.

Hogan has been in Washington for the past three days seeking to persuade the Trump administration to scale back its protectionism and work with the EU to bolster the WTO. He said the phase-one agreement between the U.S. and China represented a "managed-trade outcome" rather than one based on free commerce underpinned by the WTO.

"It will be interesting to see, is the deal that was announced, is it WTO-compatible?" Hogan said.

The European Commission, the EU's executive arm in Brussels, will likely take several days to analyze the contents of the U.S.-China trade pact, according to a senior official for the bloc. Should legal concerns arise, the commission would then need weeks or months to discuss the next steps with the EU's national capitals, the official said on the condition of anonymity.

To contact the reporter on this story: Jonathan Stearns in Washington at

To contact the editors responsible for this story: Ben Sills at, Zoe Schneeweiss

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