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
EU aims at accelerating and concluding the negotiations on an ambitious investment agreement by the end of the year.
Fifteen EU member states have breached bloc-wide rules in agreeing bilateral commercial deals with China as part of Beijing’s ambitious belt and road initiative.
Despite a recent charm offensive by senior Chinese diplomats, the chances of wrapping up a landmark investment deal with the European Union remain uncertain, analysts said.
The first significant bilateral trade agreement has been signed between the European Union (EU) and China this morning, Monday, July 20.
As Brussels and Beijing struggle to agree on climate protection and trade, the coronavirus pandemic has exacerbated their differences. The longer the two sides talk, the more China benefits.
The 22nd EU-China summit had its purpose in moving the two sides closer to a long-negotiated investment agreement, but instead revealed the scope of tensions and differences that dominate the relationship.
Europeans are especially concerned about market access, the forced transfer of technology imposed on foreign firms operating in China, the subsidies offered by Beijing to its companies, the unbalanced relation in the public procurement market.
The European Union and China have agreed to postpone a summit planned for this fall because of the coronavirus pandemic.
Many German companies are therefore still hopeful that the current negotiations for an EU-China investment deal can take a decisive step forward this year.
Crucial European demands include subsidies to state-owned enterprises, access to the Chinese market and environmental issues, according to top official.