Strasbourg, July 11:

The European Union (EU’s) top trade official said the bloc will keep closer watch on whether China is meeting its World Trade Organisation (WTO) commitments, including eliminating trade barriers that cost Europe billions in lost exports.

The EU trade commissioner, Peter Mandelson, told the European Parliament yesterday night that China was not living up to its obligations as a WTO member and should open up to more foreign trade.

“We know that our export potential is being hampered by barriers in the Chinese market — that an important part of the current trade balance is artificial,” he told EU lawmakers, according to notes of his speech. “It is a product of politics, not economics. It can be addressed by politics.”

The EU will issue a report later this year assessing whether China is taking steps to open up to foreign trade and meet other WTO commitments, Mandelson said. The 27-nation EU will also push China to open up government tenders to foreigners, he said. “China’s non-accession to the WTO Government Procurement Agreement leaves important Chinese markets closed, and China needs to honor its commitment to open access-ion negotiations in 2008,” he said.

Mandelson said he was asking for China to open up to more EU goods, services and investors. He is also pressing for ‘a sea change’ in intellectual property rights and copyrights that should eliminate counterfeits from Chinese street markets and ensure Chinese firms pay royalties to European companies for using their technology.

He also wants assurances that China won’t overproduce products such as steel and dump them on the European market, driving prices down and crippling European producers.

The EU’s top trade official repeated his warning that Europe could only stay open to China if it did the same. “It is only sustainable if we can show that EU products and services are just as welcome in China as Chinese goods are in Europe,” he said. “That’s why China needs to reciprocate by strengthening its commitment to economic openness and market reform behind its own borders.”

Chinese commerce minister Bo Xilai told Mandelson that Beijing was aware the current trade imbalance with Europe.