BY MICHAEL ELLIOTT, From the Mar. 07, 2005 issue of TIME Asia Magazine
The irony was delicious. Who would ever have thought that the principal source of disagreement between U.S. President George W. Bush and his European hosts last week would have been a European desire to sell arms and an American determination to stop them from doing so? Yet so it proved. Not even a shared dinner of lobster risotto and truffle sauce could get Bush and his French counterpart Jacques Chirac (who in this case speaks for Europe old and new) to agree on the European Union's plan to lift its embargo on supplying defense technology to China, imposed after the Tiananmen Square massacre in 1989. Bush wants the embargo to stay, lest European goods one day be used against U.S. forces, who are pledged to defend Taiwan from an unprovoked attack by China. Chirac, by contrast, said that the embargo "is no longer justified and has to be lifted."
The conventional wisdom in Europe is that the ban (which has never been watertight) will be ended this year. Conceivably, though, threats of retaliation from the U.S. Congress might convince the E.U. to back down—Sen. Richard Lugar, chairman of the Senate Foreign Relations Committee, told the Financial Times recently that he would support a ban on the export of sensitive American technology to Europe if there were a chance it would end up in Chinese hands. That will be enough to persuade some European firms with substantial American business—such as BAE Systems, the U.K's largest defense company—to stay out of the China game. But for many other European firms, the lure of the China market will be too strong to resist and they will find specious justifications for their sales. (The most specious was offered by the French Defense Minister, who seems to have convinced herself that European exports will stop China's development of its own capability in high-tech systems.) Though the E.U. is working on a code of conduct that will—it is said—prevent the export of anything really nasty, there's little point in lifting the ban unless everyone expects that trade between the E.U. and China will thereby grow.-------------------