Financial Times

Straw admits ending EU arms embargo on China will create tension with US

By James Blitz in London and Daniel Dombey in Brussels
Published: January 19 2005

Jack Straw yesterday admitted that the European Union's plans to lift the arms embargo on China would create tensions with the US, acknowledging that London, Brussels and Washington would have to "manage those differences" in the next few months.

As the foreign secretary prepares for his first official meeting next week with Condoleezza Rice, incoming US secretary of state, he conceded in an interview with the Financial Times that the EU's plans to lift the embargo create a "presentational problem" with Washington but that the UK firmly backed the move.

The US has been lobbying furiously against lifting the embargo, arguing that an increase in arms sales could endanger the security of Taiwan.

Asked whether last month's decision to lift the embargo would create further tensions between the US and EU after those surrounding the Iraq war, Mr Straw said: "The challenge in terms of foreign policy is not to eliminate differences or franchise out policy but to manage those differences."

He said the UK backed the EU move because it would be accompanied by a strengthened code of conduct with a wider remit than the embargo.

But he added: "The presentational problem we have in Washington is that people read the headline 'They've lifted the embargo' and it then takes time to explain that the embargo has very limited application."

It emerged yesterday that the EU almost doubled its approvals for arms sales to China between 2002 and 2003, raising questions about the 25-nation bloc's insistence that it has no intention of increasing sales once it lifts the embargo on Beijing.

The EU's annual report on arms exports show the value of licences to sell arms to China totalled 416m (290m) in 2003 against 210m for 2002.

But EU leaders argue that the embargo, which is not legally binding, is neither effective nor in keeping with today's commercial and political relations between Europe and China. According to information in the EU's Official Journal last month, France granted 171m of licences for arms sales to China in 2003, Italy 127m and the UK 112m - all figures well above the previous year's tallies.

The new code of conduct, which is also non-binding, has almost been agreed and includes provisions on arms-brokering and intangible transfers of technology. In addition, the EU is still discussing a transitional regime to maintain controls on countries for which embargoes are lifted. This has been harder to agree and is unlikely to be put in place before President George W. Bush visits Brussels next month.

"Everyone agrees that it's better to put the issue in the fridge until February 22 [when Mr Bush visits]," said a French official. "But after that it will go faster."