Since 2012, China has been trying to get the European Union to agree to initiate bilateral free trade agreement talks. China is absent from both the transpacific (TPP) and the transatlantic (TTIP) trade deals and wants "in" on a similarly large pact itself in order to avoid losing out on trade flows or to have to follow new "global" standards set by others. European firms, for their part, want greater openings into China and a more even playing field with domestic companies, especially State-owned enterprises.
In March 2014, Brussels agreed that once an EU-China investment treaty is concluded it will consider broader trade talks with Beijing. The investment treaty negotiations began just a few months prior, in November 2013. Once finalised, this BIT willl replace the 26 existing BITs that China has signed over the years with individual EU member states.
The EU is China’s largest trading partner, while China is the EU’s second export market.
Photo: European External Action Service - EEAS / CC BY-NC 2.0
The EU is due shortly to sign a major investment deal with China, but Germany in particular will be concerned that the sanctions may destabilise economic relations with China.
An investment deal between China and the European Union restricts Europeans from investing in Chinese media and entertainment companies but does not block Chinese firms from investing in European ones.
Beijing and Brussels are trying to finalise what has been described as ’the biggest investment agreement’ in history. But will it ever be ratified?
Hong Kong democracy activists have warned the EU it must not ratify its planned new investment deal with China at a time when Beijing is tearing up international obligations to the people of Hong Kong.
The China-EU comprehensive investment agreement (CAI) addresses important issues of market access, regulatory cooperation and sustainable development, but does not include sections on investment protection and ISDS.
GI is a label used for identifying the geographical origin of a product, and is an important type of intellectual property right.
In the EU-China Comprehensive Agreement on Investment is expected to face intense resistance from some European lawmakers, while international unionists, who say the pact will do nothing to stop human rights abuses or protect labour rights in China, have vowed to ramp up pressure over the deal.
EU negotiators made some progress in important areas like market access, investment liberalization, and sustainable development. But can an incremental bilateral agreement like the CAI really govern economic relations with today’s China?
The CAI will be judged a few years from now by its implementation and the concrete steps China takes to fulfill its promises. If European companies do not perceive any improvement, and China makes no progress on labour standards, the CAI might come to be viewed as another empty gesture.
The new EU-China Comprehensive Agreement on Investment will eventually be judged by its implementation and the concrete steps China takes to fulfill its promises. If European firms do not perceive any improvement, and China makes no progress on labor standards, the pact might come to represent an empty gesture.