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China and the EU have reached a fundamental political agreement on a new investment agreement. The breakthrough came with a video link between EU Commission President Ursula von der Leyen and EU Council President Charles Michel with China’s head of state and party Xi Jinping.
The basic agreement is a “first step” for the agreement, according to an internal document to EU members, cited by the dpa news agency. Further negotiations on the exact legal text of the agreement will follow soon. The EU Commission expects a final conclusion in early 2022.
Among other things, the agreement aims to improve market access for European companies in China and ensure fairer competitive conditions. It is the most comprehensive attempt by the EU to date to put the economic relationship with the world’s second-largest and promising economy on a new basis.
The deal had been negotiated since 2013. More recently, China made concessions on the issue of labor rights. The communist leadership has promised to make “permanent and sustainable efforts” to ratify two conventions of the international labor organization ILO against forced labor.
CSU European politician Manfred Weber praised the fact that this promise even reached an agreement. Critics, however, described the passage of the text as “a superficial service.” In China, since the Communist Party was founded, more people have been forced to work in detention centers than in any other country in the world.
As the most populous country in the world with around 1.4 billion inhabitants, China is an important trade and economic partner of the EU. Last year, between the two economic areas, goods worth an average value of 1,500 million euros were traded daily. After the United States, China is the second most important trading partner for Europeans. For the EU, the conclusion of the agreement is a prerequisite for starting the talks on a free trade agreement.
The United States criticizes that Brussels is pushing the agreement without consulting the new US administration. The EU considers these concerns to be “understandable but unjustified”. According to the internal EU document, Europe’s trading partners also benefit from greater market access, transparency and better competitive conditions in China. Greater openness to state subsidies or obligations for SOEs should also help the work of the World Trade Organization (WTO).
