The report calls China’s “growing international assertiveness” a challenge. It concedes the EU and the US “do not always agree” on how to address the issue China poses, but called for a new “transatlantic agenda” to tackle it.
The draft plan, which has been seen by the Financial Times, will be seen by national leaders on December 10 to December 11.
If approved, the new international plan could be put into action in the first half of next year.
It is unclear what sort of action the draft report calls on the US and the EU to take.
However, it does mention possible co-operation on digital regulation as well as Covid-19 policies.
It comes amid a bitter tariff clash between the EU and the US this year in a row over airline companies.
The EU’s retaliatory tariffs were reported to have totalled up to $4 billion.
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The tariffs were approved by the World Trade Organisation and relate to a dispute that has lasted over 15 years.
Last year the US hit the EU with tariffs of its own worth around $7.5 billion.
The historic row follows disagreements over subsidies that were granted to domestic airliners – Boeing in the US and Airbus in the EU.
EU Trade Commissioner Valdis Dombrovskis told a news conference: “Regrettably, despite our best efforts (and) due to lack of progress on the U.S. side, we can confirm that the European Union will later today exercise our rights and impose counter-measures awarded to us by the WTO in respect to Boeing.”
However, it is hoped ties between the EU and the US could be improved when incoming President Joe Biden takes the White House in January.
The EU-US cooperation on China follows a year of tensions between Washington and Beijing over issues ranging from coronavirus to software bans.
In addition, in 2018 President Trump initiated a trade war with China in order to rebalance a historic trade surplus.
As such, increased tariffs on Chinese imports had reached over $400 billion by early 2020 and Chinese tariffs on US imports had reached around $138 billion.
The US and China have also clashed over the South China Sea – a region to which China makes many controversial territorial claims.
The US has regularly carried out freedom of navigation exercises with a military presence in the region.
US Secretary of State Mike Pompeo blasted China for a “campaign of bullying” to control resources in the region.
He warned: “We stand with the international community in defense of freedom of the seas and respect for sovereignty and reject any push to impose ‘might makes right’ in the South China Sea or the wider region.”
There have also been incidents in which US spy planes, flying over China, disguised themselves as civilian aircraft – something critics describes as illegal and dangerous.