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 conditions have been listed in a draft report prepared by foreign affairs committee of the European Parliament.
The recent tit-for-tat sanctions between the EU and China have cast a shadow over the deal’s future and frozen talks for the time being. But if the agreement reaches the finish line, what is at stake?
Hope for the EU-China comprehensive agreement on investment (CAI) springs eternal, after Emmanuel Macron and Angela Merkel had another call with Xi Jinping.
Technical work will continue to ready the deal if it is enacted, even though the European Parliament froze its consideration after Beijing sanctioned several of its members, Slovenian ambassador says.
European lawmakers overwhelmingly approved a resolution to withhold ratification of the investment deal with China, so long as its “baseless and arbitrary” penalties were in place.
Draft calls on EU to work with US on China, and to plan deals with Taiwan.
The situation is less dramatic than people seem to think. The EU is still working very closely with China’s Ministry of Commerce, the bloc’s ambassador in Beijing said.
A long-negotiated investment agreement between EU and China was more of an "intention than a deal and it could be a long time before it became a reality, an EU commissioner said.
Trade and investment agreements cannot transform China into a Western-style market economy or turn it into a democracy.
The short-sighted German-driven agreement betrays the European project and poses a major economic and political problem for the rest of the West.