EUOBSERVER / BRUSSELS - EU-China relations have been placed under increased strain following news that a European firm is to sell a number of helicopters to Taiwan, the disputed island over which China claims sovereignty.

The revelation comes just a day after China hauled the EU to the World Trade Organisation over a long-running shoe tariff dispute.

Reports on Friday (5 February) said Taiwan's military is set to buy three helicopters from German manufacturer Eurocopter, a subsidiary of EADS, with an option to buy up to 17 more.

Taiwan's defence ministry spokesman Martin Yu said the contract for the EC-225 search-and-rescue helicopters was valued at $111 million.

The European deal comes hot on the heels of last week's news that Taiwan will buy roughly $6.4 billion-worth of arms from US companies, prompting Chinese condemnation and threats of sanctions.

Whether Europe will now come in for the same response is yet to be seen.

Some analysts suggest Beijing's response may be more muted due to an unwillingness to fight on two diplomatic fronts as the same time.

Recent murmurings within the EU over a possible lifting of the bloc's arms embargo with China could also result in a softer response from the Asian powerhouse.

EUOBSERVER / BRUSSELS - EU-China trade tensions were further strained on Thursday (4 February), after China filed a formal complaint with the World Trade Organisation over European shoes tariffs.

The Chinese government said European tariffs "violated various obligations under the WTO and consequently caused damage to the legitimate rights and interests of Chinese exporters."

Brussels immediately hit back, saying the tariffs had been imposed in response to the "unfair trade practices" pursued by the Asian powerhouse.

"Anti-dumping measures are not about protectionism; they are about fighting unfair trade," said the European Commission's acting trade spokesperson, John Clancy.

"The decision to impose measures was taken on the basis of clear evidence that dumping of Chinese products has taken place and that this is harming the otherwise competitive EU industry," he added.

The quarrel comes on the same day that US President Barack Obama vowed to take a "much tougher" stance on China, in a bid to make sure it opens its markets to US exporters.

Sino-American relations are already frayed following last Friday's announcement that US companies are set to sell $6.4 billion worth of arms to Taiwan.

China joined the WTO in 2001, but waited until July of last year to file its one and only unfair trade case against the EU. Thursday's decision to haul the EU to the international trade body is been seen as a sign of greater trade assertiveness by some analysts.

Controversial tariffs

Europe itself has been divided over the shoe tariff issue, with producer nations such as Italy strongly in favour, while several net exporting states have expressed their opposition to the duties.

On 22 December, EU countries voted to extend anti-dumping duties on Chinese and Vietnamese leather footwear imports for a further 15 months as of January 2010.

In total, 13 member states voted against the commission's proposal to extend the duties, nine voted in favour and five abstained. Under EU anti-dumping rules, abstentions count in favour of a commission proposal.

The European duties add between 9.7 percent and 16.5 percent to the import price of Chinese shoes and 10 percent to Vietnamese shoes.

In an eight-page legal complaint, the Chinese government requested consultations on both the original 2006 decision to impose the shoe duties and last year's move to extend them.

The European Footwear Alliance (EFA), which represents several big manufacturers such as Adidas and Timberland, welcomed China's move.

"The EFA shares China's view that the EU's decision to extend the duties for a further 15 months in December 2009 was based on a very questionable investigation and a flawed analysis of the economic facts," said the group in a statement.

"Ironically, the measure hurts European business and consumers the most," it added.

EUOBSERVER / BRUSSELS - The Spanish EU presidency has indicated it is willing to reconsider the bloc's arms embargo with China, implemented over 20 years ago following the 1989 Tiananmen Square crackdown on Chinese pro-democracy protesters.

Following a meeting of EU foreign ministers in Brussels on Tuesday (26 January), Spanish foreign minister Miguel Angel Moratinos said his country was "weighing the pros and cons" of lifting the ban.

"We are all aware of the new role which China is assuming in the world," he added.

China considers an end to the ban to be long overdue. "The embargo is outdated, it does not go along with the partnership between China and the EU," Wang Xining, spokesman for the Chinese mission to the EU, told EUobserver.

"Its a political principle on the definition of the relationship," he added, indicating that China was not necessarily going to place a large military order should the embargo be lifted.

France has been a vocal supporter of ending the ban, a line Moratinos said Spain would now follow, but other member states have traditionally indicated China's human rights record did not merit an end to the EU restriction.

Last October saw the EU lift an arms embargo against Uzbekistan however, despite continuing concerns about human rights in the central Asian nation, suggesting a reluctance to allow full Chinese access to EU military capabilities is also a factor.

European diplomats also queried whether the Spanish decision to visit the perennial issue would win the backing of all 27 member states this time round, with any decision requiring unanimity for a change of position.

The United States, which also maintains an arms embargo on China, is a further complicating factor, with the country likely to be reticent towards a unilateral European move.

The European Parliament has shown its support for the ban, voting in 2008 to maintain it as long as Beijing supports armed forces and groups involved in African conflicts in general.

News that Spain would revisit the thorny issue first hit the headlines last week following a China Daily interview with Spain's ambassador in Beijing.

The issue has subsequently attracted considerable media attention in the Asian powerhouse.