Merkel, Chinese premier defend Iran deal, free trade

German Chancellor Angela Merkel and Chinese Premier Li Keqiang defended the Iran nuclear deal on Thursday, with Li hinting that terminating the pact would complicate negotiations with North Korea.

Merkel and Li showed a united front on Iran and free trade – two issues that have seen high-profile interventions by US President Donald Trump – during their meeting at the opulent Great Hall of the People in Beijing.

Li warned that ending the agreement with Tehran "will not just impact Iran, but also have a negative impact on (the ability) to solve other hot international issues through peaceful negotiations."

He did not mention North Korea by name, but analysts have warned that Trump's withdrawal from the Iran deal dented Washington's negotiating credibility ahead of his scheduled meeting with North Korean leader Kim Jong-un next month.

The German leader also sounded the alarm about the economic impact on Europe of Trump's move to quit the Iran agreement.

TRT World's Patrick Fok has more details.

Trump's decision to reimpose sanctions on Tehran, despite pleas from allies to maintain the deal, could hit European firms that have done business with Iran since the 2015 accord was signed.

If European companies pull out or shrink operations in Iran fearing US sanctions, it would "create an opportunity for businesses in other countries to step in and play a greater role", Merkel said.

'China's doors will be opened even more'

On trade, Merkel welcomed China's moves to reduce automobile import tariffs and allow foreign carmakers to own a majority stake in joint ventures with Chinese partners.

The chancellor drove home Berlin's demand for Beijing to ease barriers on foreign investment, saying the two countries would sign a memorandum of understanding to offer mutual access to each others' markets for autonomous vehicles.

"China and Germany are on the path of promoting multilateralism and bolstering free trade," said Merkel, who was accompanied by an industry delegation of 18 German executives.

Li hinted that a China-EU investment agreement, which has been in the works for years, might be signed during a bilateral meeting in July in Beijing.

"China's doors (for investment) will be opened even more," Li said.

Merkel was expected to take up the case of Liu Xia, widow of Nobel peace laureate Liu Xiaobo, who remains under house arrest without charges nearly a year after her husband died of cancer in custody.

But Li said he hoped for a fair discussion on human rights. 

China, Germany in Trump's firing line

Germany and China, two exporting nations that run large trade surpluses with the United States, have found themselves in Trump's firing line and are scrambling to preserve the rules-based multilateral order on which their prosperity rests.

But while Merkel's hosts may be keen to send a message of total Chinese-German solidarity in Washington's direction, German officials have suggested that Merkel must avoid the appearance of siding too openly with China in a confrontation with Germany's long-time ally.

But Trump's "America First" trade policy, his administration's professed disdain for the World Trade Organisation, as well as his withdrawal from the Iran nuclear deal, have pushed China and Germany into closer alignment, German officials say.

Merkel went to Washington last month to lobby Trump to stay in the Iran nuclear pact, only to see him withdraw days later and threaten sanctions against European firms that continue to respect it.

The trip is Merkel's eleventh to China since becoming chancellor in 2005.