The China-EU formula for institutionalized dispute management

Editor's note: Yang Hangjun is a professor and executive dean of the Graduate School of Excellence of the University of International Business and Economics.

This article reflects the author's views and not necessarily those of CGTN.

It has been translated from Chinese and edited for clarity and brevity.

The Second Regular Meeting of the China-EU Trade and Investment Consultation Mechanism, held in Beijing from October 8 to 9, concluded with a consensus document outlining 16 outcomes.

Crucially, this list transforms disputes into procedural matters that are negotiable, trackable, and reviewable, thereby facilitating successive rounds of dialogue.

Launched in Brussels on June 29, the mechanism encompasses trade and investment balance, export controls, intellectual property rights, and WTO reform, with one-to-two ministerial-level meetings scheduled annually.

The electric vehicle (EV) case best exemplifies this procedural approach: In January, the EU issued guidance allowing eligible companies to offer price undertakings as an alternative to countervailing duties — a process reaffirmed at the recent meeting.

While substantive disagreements persist, a clear pathway for managing them has been established.

For both sides, the priority is now to accelerate the implementation of existing consensus while maintaining communication on outstanding differences.

For businesses, the primary benefit of this framework is the introduction of predictability into policy shifts.

Establishing manufacturing facilities, obtaining certifications, and building distribution networks in Europe require substantial upfront investment and high asset specificity; sudden regulatory changes risk rendering these sunk costs.

The resulting delays, declining orders, and inventory backlogs ultimately drive up corporate costs and disrupt planning.

With China-EU goods trade reaching 4.2 trillion yuan ($616 billion) in the first eight months of this year — an 8.1% increase — the volume is simply too significant to withstand frequent policy volatility.

On a deeper level, the procedure itself constrains unilateral action.