By Emre Peker and Stacy Meichtry
BRUSSELS -- French President Emmanuel Macron's bid to revitalize
the European Union is bumping into longstanding divisions over
trade, with countries that depend on Chinese cash resisting his
push to scrutinize foreign investments.
Following Mr. Macron electoral victories on a pro-European
platform, he received a warm welcome at his first EU summit in
Brussels. His ambitious agenda, however, quickly got bogged down as
some EU governments attacked Mr. Macron's proposal to screen the
flow of global capital into Europe.
"Poland will protest against protectionist measures," Prime
Minister Beata Szydlo said Friday, as the two-day gathering of EU
leaders ended.
The French president also drew ire for implying Eastern European
countries were treating the bloc like a "supermarket" by tapping
its benefits without upholding its democratic values.
"His start has not been very promising," said Hungarian Prime
Minister Viktor Orban, who is in a dispute with the EU over his
migration policies and crackdown on critics. "He thought yesterday
that he could kick the central European countries. This is not how
it works here."
The sparring illustrates the hurdles that Mr. Macron faces in
uniting a bloc that has grappled for decades with bridging
competing priorities. To overcome the challenge, the French
leader's top goal is to forge common policies with German
Chancellor Angela Merkel to revamp the Franco-German engine that
has traditionally driven European reforms.
At stake is the EU's ability to champion free trade in response
to U.S. President Donald Trump's protectionist policies, without
exposing European workers to what populists call "savage
globalism." That push comes as the bloc also struggles to pry open
China's market for European businesses, just as Chinese investments
in EU companies hit a record $48 billion last year, according to
data provider Dealogic.
France and Germany have long sought to block Chinese access to
strategic industries, but some EU members have stymied that effort
to safeguard billions of dollars from China.
"Attachment to free trade and multilateralism does not mean
naiveté, " Mr. Macron said. "Fair competition is preferable to the
law of the jungle."
Asked about Mr. Macron's tough line, a Chinese Foreign Ministry
spokesman noted the "surge in protectionism" that the EU and many
countries are facing, but said EU leaders recently pledged to
cooperate with China. "We hope the EU can offer a sound and
unbiased environment for Chinese companies," the spokesman, Geng
Shuang, said at a daily briefing Friday in Beijing.
Starting with a suggestion that the EU respond to Mr. Trump's
"Buy American" policy in kind, Mr. Macron has emerged as the
outspoken champion of shielding European industries from unfair
competition.
That cause is also finding traction in Germany, where Chinese
acquisitions have hit a record and fueled concern in Berlin that
the country is losing control over its most competitive and
advanced companies. At the same time, European investments in China
have declined for four years due to obstruction from Beijing,
according to a joint report by Mercator Institute for China Studies
and Rhodium Group.
"In times where protectionism is at the top of the agenda for
some countries, a clear commitment to free but rules-based trade is
very important," Ms. Merkel said during a joint press briefing with
the French president.
Mr. Macron's election has contributed to the momentum slowly
building behind a Paris-Berlin proposal, also supported by Rome,
for the EU to scrutinize foreign investments. Its evolution could
serve as a bellwether for Ms. Merkel and Mr. Macron's ability to
shape policy in Brussels.
The effort got a boost Friday, when EU leaders said they
welcomed an initiative by the bloc's executive -- the European
Commission -- to "analyze investments from third countries in
strategic sectors."
Resistance from many EU members forced France and Germany to
significantly water down the commission's directive, which
initially sought to lay the groundwork for a bill.
"Some feel this should be done in a European scale and others
feel this is a national competence," an EU diplomat said. "We're
not ready to jump to a conclusion that we need new
legislation."
But Friday's summit put the issue of screening foreign
investments firmly on the EU agenda.
A similar effort fizzled out in 2011, and the success of the
current initiative is far from certain. While conditions are
improving, economic disparities within the bloc and different
global trade links create difficulties for developing a common
agenda on foreign investments.
"There's a push by Macron, there's resistance by some members,"
an EU official said. "Portugal, Greece, others -- they need
investment for growth, they're eager to get Chinese money to get
themselves out of the water."
There are other hurdles for Mr. Macron as he proposes deeper
integration to overcome the EU's crisis-marred, decadelong slumber.
The French president has criticized European countries for not
taking refugees and accused them of "social dumping," or sending
cheap labor, to Western Europe while luring away its manufacturers
with lower wages.
"We differ in our opinions about many matters," Ms. Szydlo,
Poland's prime minister, said. "But being open to dialogue and
trying to find consensus is a good prospect."
Valentina Pop and Julian E. Barnes in Brussels and Charles
Hutzler in Beijing contributed to this article.
Write to Emre Peker at emre.peker@wsj.com and Stacy Meichtry at
stacy.meichtry@wsj.com
(END) Dow Jones Newswires
June 23, 2017 14:59 ET (18:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.