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Almost nothing happened for years, now it happened very quickly: the EU and China agreed to the investment protection agreement. The sudden rush was not accidental.
China and the EU have basically agreed to a future-oriented investment deal. After seven years, the president of the Commission, Ursula von der Leyen, and the Chinese state media announced the conclusion of the negotiations on Wednesday.
Before that, EU leaders had spoken with von der Leyen and Council President Charles Michel, as well as Chancellor Angela Merkel for the German presidency of the Council of the EU and French President Emmanuel Macron via video. with the head of state and party of China, Xi Jinping.
China had made surprising concessions
The agreement aims to improve market access for European companies in China, ensure fair competition and open up new business opportunities. It is the most comprehensive attempt by the EU to date to put the economic relationship with the second emerging economy on a new basis. But the critics don’t go far enough. The future US administration also showed some reservations about Europeans acting alone.
“The world after the pandemic needs a strong relationship between the EU and China,” wrote Commission President von der Leyen on Twitter. “But that requires cooperation and trust, also in trade and investment.” The EU has the largest open market in the world. “But we value reciprocity and fair competition.”
The Chinese president said the agreement demonstrates “China’s determination to open up more.”
The breakthrough came after China made new promises on the issue of labor rights. The communist leadership has promised to undertake “permanent and sustainable efforts” to ratify two conventions of the international labor organization ILO against forced labor, according to an internal report to the member states of the EU that has received the dpa. However, critics saw only “superficial comments”.
As the most populous country in the world with 1.4 billion inhabitants, China is an important trade and economic partner of the EU. Last year, goods worth an average of € 1.5 billion were exchanged between the two parties every day. After the United States, China is the second most important trading partner for Europeans. For the EU, the conclusion of the agreement is also a prerequisite for starting talks on a free trade agreement.
The China deal would also be a major success for Merkel
In principle, the agreement is a “first step”, which will be followed by further negotiations on the exact legal text of the agreement and “significant technical work”, according to the internal document sent to EU members. Therefore, the EU Commission does not expect a conclusion until “early 2022”.
For the Chancellor, the breakthrough shortly before the end of the German Council Presidency would be a major success. But it would also be a symbolic victory for China’s head of state and party in the context of the ongoing trade war with the United States, and during the transfer of power in Washington.
America wants to keep fighting hard against China
US President-elect Joe Biden wants to pursue the tough course against China and forge alliances with allies such as Europeans. There are concerns that Brussels is acting too quickly and without further consultation with the new US administration.
“These concerns are understandable, but unjustified,” says the internal EU document. The EU welcomes cooperation with the United States towards China, which, however, should be based on “different pillars”. Europe’s trading partners also benefited 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).
Manfred Weber: “Europe must not become the loser”
The agreement was fought to the end. China has made new concessions in sea or air transport services, in the areas of finance, computers, research and development, alternative propulsion vehicles, telecommunications, cloud services and the operation of private hospitals, according to an EU document.
CSU European politician Manfred Weber welcomed the project. “There is currently the threat that China will be the big winner from the Crown crisis, and Europe must not become the big loser,” said the leader of the European People’s Party group in Brussels.
“That is why we must continue to have the strength to improve business relations, also to enter into modern business contracts and not leave them in the background.” Cooperation with China is a future task.
“Employee rights are part of business contracts”
China is not only an interesting sales market, but also a systems competitor. “So today’s modern trade policy must be tied to our principles, to our agenda, which is shaped by our values,” Weber said.
“And that means in concrete terms that the issue of forced labor, the issue of labor standards, is part of modern commercial contracts.” Furthermore, it is about fair competitive conditions. If Chinese corporations are allowed to shop in Europe, it must be the other way around.
“The deal will have to prove its worth”
The Greens’ foreign politician Jürgen Trittin also welcomed the deal, but at the same time noted that there were still deficits. “After seven years of tough negotiations, China apparently was ready to make decisive concessions on issues of market access and forced technology transfer,” he added. said Trittin t-online. “This is in the interest of Europe and its large and medium-sized companies.”
He also warned: “The agreement will have to prove its worth in practice.” Despite some successes, he still sees several deficits. “Unfortunately, the regulations on sustainability and labor standards are only declamatory.” Trittin also criticized that regulations on investment protection have been postponed in a separate deal. “Investments need legal certainty.”
