US, EU on Collision Course Over China

The United States and the European Union are heading for a face-off over the EU's planned lifting of a 15-year-old arms embargo on China after a senior US congressman issued a blunt warning Wednesday over a possible trade war if the ban ends.

Richard Lugar, the powerful Republican head of the Senate foreign relations committee, escalated a row that has been simmering since President George W. Bush's visit to Brussels in February by warning the Europeans that the US would retaliate by stopping sales of military technology to Europe.

It was not only the Republicans who had harsh words for the EU. Democrat Senator Joseph Biden joined in, saying that the lifting of the ban would be "a non-starter with Congress" after he and Lugar met with President Bush in the White House.

The warning from Congress follows a rebuke from Taiwan's President Chen Shui-bian on Tuesday when he told the EU via a video link that EU plans to lift the arms embargo endangered the military balance in East Asia and accused some in Europe of double standards in currying favour with Beijing.

He added that the planned lifting of the arms ban could also let the Chinese think it did not need to proceed with democratic reforms.

"Should the EU decide to lift its arms embargo against China it might lead to a tilt in the military balance in the Taiwan Strait, which would pose a clear threat to peace and stability," he said.

Bush returned from his European tour smarting from his China-related encounters with European leaders, especially the one that heralded a widely reported and embarrassing no-nonsense declaration from French President Jacques Chirac that Europe intended to lift the ban. The end of the embargo has been penciled in for May 8, when the EU holds a meeting with the Chinese leadership.

EU must prepare a case for Congress

The Europeans are expected to make a case to Congress for acceptance of their decision by arguing that the embargo was a response to Tiananmen Square massacre in 1989, and that China has moved on dramatically since then. During his visit, Bush let it be known that he was "open minded" about the lifting of the ban, but told EU leaders that they would have to convince Congress.

If they can't, the repairs made to the US-EU relationship during Bush's visit could come unravel. "Europe can do defense trade with China or it can do defense trade with the US. It can't do both," Daniel Goure, a Pentagon consultant and vice president of the Lexington Institute military think-tank, told the British Guardian newspaper.

Europeans want discussion with US

The Europeans went into damage limitation mode soon after the statements from Congress were issued.

"It is not our intention that this change will increase the quantity or the quality of arms exports to China," an EU commission spokeswoman told reporters. "Neither is it our intention to do anything to upset the military equilibrium in south-east Asia. There are concerns in America about high technology transfer. We have made it clear that we want to talk to them about this."

The US Defense Department has also made its feelings known regarding the situation. The Pentagon is keeping a concerned eye on an ambitious Chinese military build-up which its experts believe is aimed at threatening Taiwan -- a country which the United Sates is committed to defending.

Chinese build-up worrying Pentagon

China has allegedly boosted its military with orders of some 600 advanced Russian fighter jets, Mig-31s and Mig-35s, and had bought modern Russian destroyers and submarines. But the Pentagon is most concerned about the possible sale of advanced European communications and sensor systems, like fiber optics, infra-red, sonar and radar scanners.

A recent report in the New York Times has done nothing to calm US jitters, with the paper citing US intelligence pictures showing the Chinese build-up and the apparent construction of 23 amphibious assault ships.