Connect with us

China

EU-China investment agreement ‘anchors our values-based trade agenda with one of our largest trading partners’ says Dombrovskis

SHARE:

Published

on

We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. You can unsubscribe at any time.

The EU and China concluded negotiations for a Comprehensive Agreement on Investment (CAI).  The negotiations have taken more than seven years but received new impetus in 2019 when the EU put forward its new EU-China strategy. 

In that strategy, the EU set out its expectation that the new investment agreement would address imbalances and asymmetries in the EU’s relations with China. In this year’s summit meetings both sides committed to concluding negotiations on the CAI before the end of 2020. However, the EU has always put substance ahead of timing. 

The EU side claims to have achieved substantive outcomes under three key pillars of the negotiations: market access, the level playing field provisions and sustainable development. A senior official described it as the most ambitious that China has ever agreed to. 

Executive Vice President and Trade Commissioner Valdis Dombrovskis said: “This deal will give European businesses a major boost in one of the world's biggest and fastest-growing markets, helping them to operate and compete in China. It also anchors our values-based trade agenda with one of our largest trading partners. We have secured binding commitments on the environment, climate change and combating forced labour. We will engage closely with China to ensure that all commitments are honoured fully.”

European Commission President Ursula von der Leyen said: “Today‘s agreement is an important landmark in our relationship with China and for our values-based trade agenda. It will provide unprecedented access to the Chinese market for European investors, enabling our businesses to grow and create jobs. It will also commit China to ambitious principles on sustainability, transparency and non-discrimination. The agreement will rebalance our economic relationship with China.”

So the investment agreement will improve market access of European investors to the Chinese market across economic sectors. This includes new market access opportunities in crucial sectors such as electric vehicles, cloud services, financial services and health. 

In relation to level playing field provisions, the agreement includes rules on the behavior of state-owned enterprises; it enhances transparency of subsidies, and thereby closes a loophole in the WTO agreement where there are no rules on transparency of subsidies for services, there are also clear rules against forced transfer of technology.

Advertisement

On the objectives of promoting the EU’s core values and sustainability objectives, progress has been made. For the first time ever, China has agreed to what has been described by the same official as solid provisions on sustainable development, including in relation to environment and climate, such as the implementation of the Paris Agreement, as well as commitments on corporate social responsibility and labour. These rules are subject to a transparent enforcement mechanism as in our FTA, as clearly investment and labor rights are very closely interlinked. The official underlined that China has agreed in particular to pursue the ratification of International Labour Organisations conventions on the use of forced labor (Conventions 29 and 105).

Share this article:

EU Reporter publishes articles from a variety of outside sources which express a wide range of viewpoints. The positions taken in these articles are not necessarily those of EU Reporter.

Trending