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The Straits Times | 14 September 2020
Merkel says EU put pressure on China over investment agreement
BERLIN • European Union leaders told Chinese President Xi Jinping yesterday to speed up negotiations to conclude a China-EU investment deal, German Chancellor Angela Merkel said, adding that competition with China must be fair.
"We put on pressure... to make progress on the investment agreement," Dr Merkel told reporters, after a video summit with Mr Xi.
"Overall, cooperation with China must be based on certain principles - reciprocity, fair competition. We are different social systems, but while we are committed to multilateralism, it must be rules-based," she added.
Dr Merkel joined EU summit chair Charles Michel and European Commission chief Ursula von der Leyen in the video conference with Mr Xi.
"In the last 15 years, China has become much stronger economically and this means that the demand for reciprocity - for a level playing field - is of course very justified today," Dr Merkel said.
The EU and China have been in negotiations since 2013 on a bilateral pact that would reduce Chinese restrictions on European companies. In April last year, the EU and China set a target date of the end of this year for reaching an "ambitious" investment deal.
EU-China relations have been strained this year by issues such as the alleged Chinese disinformation about the coronavirus, Beijing’s controversial national security law for Hong Kong and stepped-up European efforts to protect domestic manufacturers from foreign competitors.
The EU also wants stronger commitments on climate change from China, the world’s top polluter.
Still, the bloc is keen to show economic rewards from a policy approach towards China that is less confrontational than that pursued by US President Donald Trump’s administration.
The EU argues that the global economic slump triggered by the coronavirus strengthens the case for an accord that would open the Chinese market more to foreign investors.
Ahead of the online summit yesterday, the EU and China had signed a deal to protect each other’s exported food and drinks items from feta cheese to Pixian bean paste.
The two sides will respect the names of 100 European regional food designations and 100 Chinese equivalents, meaning for example that China will allow "champagne" to be used only for sparkling wine from the French region of that name.
China was the third-largest destination for EU agricultural and food products last year, worth €14.5 billion (S$23.5 billion).
The new deal is a trade coup for Europe as producers from the United States, Australia and New Zealand will no longer be able to use the protected names on their exports to China, although there is a transition period for certain cheeses.