Europe and China reach an agreement in principle on investments
After seven years of negotiations, the two sides are ready to strike deal that would guarantee reciprocity of treatment for European and Chinese investors. Germany’s Merkel pushed for the deal, but some EU lawmakers remain highly critical. China makes some vague commitments on forced labour; cooperation with US President Biden is at risk.
Brussels (AsiaNews/Agencies) – The European Union and China reached an agreement in principle yesterday to finalise a major bilateral investment agreement
European leaders and Chinese president Xi Jinping met via videoconference to seal the deal after negotiations that have dragged on since 2013.
German Chancellor Angela Merkel, who is the outgoing president of the Council of the European Union, pushed for action to reach a Comprehensive Agreement on Investment (CAI).
The turning point came when Xi gave the green light for easier access to China’s domestic market and sustainable development.
For the EU, the agreement will serve to rebalance economic relations with the Asian giant, which has been accused of unfair trade practices, such as subsidies to state-owned enterprises and social dumping.
For years, Europeans have been demanding reciprocity of treatment for their investors. Whilst Chinese companies can operate almost freely in Europe, European companies in China are forced into joint ventures with local companies and required to transfer technological and industrial secrets to them.
The agreement seemed to be on the verge of collapsing after media reported that hundreds of thousands of Uyghur Muslims had been sent to work in forced labour camps in Xinjiang.
The two sides agreed on a formula that provides for Beijing's commitment to implement the International Labour Organisation (ILO) conventions that it has already signed, and to work on the ratification of all ILO conventions, including the one on forced labour.
Several Members of the European Parliament (MEPs) oppose the agreement. For them, given the situation in Xinjiang (and Hong Kong), China must do more in terms of respect for human rights. They also criticised Chancellor Merkel for pushing the negotiations 20 days before the inauguration of the new US president.
Unlike Donald Trump, US President-elect Joe Biden has called for a transatlantic common front to meet China’s global challenge, an invitation that Europeans had welcomed in recent weeks.
The EU Commission has reacted to criticism by noting that the agreement with China has yet to be ratified by the European Parliament.
Its full implementation is not expected for two years, during which the Union will review the commitments made by the Chinese government.