The New Nation - Internet Edition

M N Hebbar

AS THE Olympics hopefuls go through their paces and train rigorously for their hour of glory at Beijing - just four months away - governments around the world have been grappling with the unexpected fallout

- demonstrations by Tibetan protesters against human rights abuses, cultural genocide and political repression in Tibet, and attacks on the Olympic torch as its flame seared through their cities, leaving the host countries deeply embarrassed.

"In hindsight", moaned the IOC boss, "maybe the games should not have been awarded to China". That it was a blatantly political move remains undisputed. Tibetan protests and rioting in the Tibetan capital, Lhasa, as well as worldwide demonstrations by supporters have galvanised critics of Beijing's regime and threatened to overshadow the Olympics, an object of massive national pride for China. Hubris might still waylay the event.

The inglorious runs of the Olympics torch relay in London, Paris, San Francisco, Delhi and Nagano have left the Chinese government flustered and furious. Expectedly, its leaders have reacted harshly, only causing worldwide dismay and disgust at Beijing's methods of dealing with its nearly botched opportunity to shine as the newly emblazoned star on the global stage.

What has the European Union got to do with the Olympics and China's shenanigans, one might ask. Actually, quite a lot, it would seem.

Here's why. It is an opportune moment to exercise some careful diplomacy if it is done right. Europe's political leaders have usually shied away from confrontation with China, preferring dialogue instead, to tackle growing China-linked problems.

Now the largest ever trade mission of the European Commission is on its way to China at a time when trade and sports might seem distant relations. More to the point, Trade Commissioner Peter Mandelson has refrained from joining the chorus of "let's rub China's nose in the ground" as the rest of Europe is prone to do.

On the contrary, Mandelson has pleased his hosts in Beijing by delivering an eloquent speech before the visit to make an impassioned plea in telling countries not to humiliate China by boycotting the Olympics and calling threats to do so a "political gimmick". Some of EU's heavyweights will not be present at the opening of the games. German chancellor Angela Merkel has already declined to attend. Britain's prime minister Gordon Brown and French president Nicolas Sarkozy are a no-no. Several other EU leaders are hesitant.

Mandelson certainly has a point here but before the Chinese drool over this unexpected reasonableness from Brussels, he has added a caveat. He expects China to come forward with precise and rapid concessions on its trade tariffs, as part of the Doha round of trade talks. It also needs to do more to show its total commitment within international laws and institutions such as the World Trade Organisation (WTO). Curbing of greenhouse gases is another priority.

Problems with China are several. To start with, there is the rapidly growing two-way trade between the EU and China, expanding by over 20 per cent annually, and swinging sharply in China's favour. Furthermore, the problem is compounded by the fact that China quietly ignores gentle hints to abide by commitments it made when it joined the WTO in 2001. Accusations are about state subsidies and a failure to guard against the theft of intellectual property. And there are reports from the EU Chamber of Commerce in China that foreign companies face a threat of unequal treatment by newly empowered Chinese regulators.

Mandelson has been repeatedly making the argument that if the Doha Round is not concluded during the present US presidency, chances are that it will never happen. Despite seeming progress in the flurry of talks, its survival is highly improbable if they are extended into the next US presidency. Indeed, Mandelson has predicted that the Doha Round will not survive this extension, having already seen seven faltering years passing from one negotiating team to another, like a barely smouldering Olympic torch. Extinction is near at hand.

And more Mandarin will be heard when a team of European commissioners, led by Jose Manuel Barroso, the Commission president, descends on Beijing shortly to create a new EU-China "high level mechanism" to iron out the many sources of friction in the trading relationship. Such a body might help in militating against the rising China-bashing chorus among Europe's manufacturers, frustrated by the inaction of the EU in redressing their grievances. Pointedly, the European Parliament voted last week to urge European leaders to boycott the Olympics opening.

A reality check reveals that China's behaviour after joining the World Trade Organisation in 2001 has not lived up to its commitments, including slashing many of its tariffs and putting into place legal protection for foreign companies entering its markets. In fact, China's initial euphoria at joining the club has been followed by a steady decline in its reforms, causing huge frustration in Europe, and the US.

All of this has only given rise to the cynical view that Beijing was untrustworthy and intent only on self-aggrandisement at any cost. And this has not been helped by the fact that the EU itself seldom functions as a single bloc, especially on many China-centric issues.

Opinion is divided among European citizens on whether China represents an economic threat or an opportunity. While countries such as Germany and Sweden thrive on the export of capital goods to China, others in southern Europe complain vociferously that their traditional exports such as shoes and textiles are being decimated by China. In eastern Europe, businesses built on relatively cheap labour fear China greatly.

Despite the argument of economics, it must be realised that it would be politically impossible for Brussels to seem inactive on China without further damaging the cause of free trade. Mandelson's testing of the new opening is a move in the right direction on the board of Chinese checkers. He can leverage the Olympics goodwill for long-term EU advantages.

China would do almost anything - short of seeming to have capitulated - towards maintaining its dignity and the record of a successful Olympics host. Its already bruised image may take some more battering before the games begin. But it would be in the interests of both China and the EU to let wiser counsel prevail. Mandelson can return from Beijing with genuine Chinese concessions if the EU can reciprocate by shedding its protectionist instincts.

(M N Hebbar is a Berlin based writer)