Since last Friday, diplomatic officials from the European Union and Germany have been talking in the media about the imminent conclusion of a comprehensive investment agreement between China and Europe by the end of the year, after nearly seven years of negotiations, at a time when the new crown epidemic and geopolitical changes are attracting much attention. This news is also increasingly attracting the attention of European experts and officials on China and parliamentarians. At the same time, the U.S. President-elect Joe Biden’s team, through his next national security advisor choice Jake Sullivan, has also expressed a desire to consult with the European side first. What is more interesting is that despite previous reports that there are different voices within the 27 EU member states on whether they should reach an investment agreement with China at this time, but there has been a lack of solid information to confirm it, Polish Foreign Minister Zbigniew Rau said publicly for the first time via Twitter on Dec. 22 that the EU side needs more consultation and transparency, and said, “Let’s make our transnational cooperation more transparent. He said, “Let’s get our transatlantic allies on board. A good, balanced agreement is better than an immature one”, the opposing view.
Reuters 18 reported that German and EU officials said the same day that the EU and China aim to reach a China-EU Comprehensive Investment Agreement by the end of 2020 to give European companies more access to the Chinese market. Chinese Foreign Minister Wang Yi pointed out during a collective meeting with the EU and the ambassadors of the 27 member states in Beijing on the 21st that China became the EU’s top trading partner for the first time this year, the two sides officially signed the China-EU Geographical Indications Agreement, the China-EU Investment Agreement is expected to be agreed, and the two sides decided to establish two high-level dialogue mechanisms on green and digital. EU Ambassador to China Nicolas Chapuis also reviewed the goal of completing the negotiations on the China-EU Comprehensive Investment Agreement (CIA) by the end of this year, noting that progress has been made in the ongoing talks and that both sides have been in contact to resolve outstanding issues.
In response to the CEIBS issue, Reuters quoted an EU official as saying that the agreement is close to being reached under the impetus of German Chancellor Angela Merkel. Germany, which currently holds the EU’s rotating presidency until the end of the year, is Europe’s largest exporter to China. Another EU official said Brussels has taken steps to more closely monitor Chinese investments in strategic European sectors as the U.S. intensifies its trade war with Beijing and China fears being isolated by the West. In addition, a senior Western diplomat in Beijing said the biggest sticking point in sealing investment agreements has to do with sustainable development, and he noted European concerns about Chinese labor issues. Beijing has reportedly not ratified four of the eight major International Labor Organization conventions, including those on forced labor and the right to collective bargaining. The Chinese side is very ambitious in its agreement, according to the diplomat in China. “They are asking for the impossible,” the diplomat said. “They’re asking for opening up for Chinese investment in Europe in areas like energy, water treatment, utilities, etc., that are not open to any other party.”
In response, Sullivan tweeted on the 21st, “The Biden-Harris Administration welcomes early consultations with our European partners on our shared concerns about China’s economic practices.” Bloomberg, for its part, quoted Mikko Huotari, vice president of the Mercator Center for China Studies (Merics), a Berlin-based think tank, as saying, “The EU wants the comprehensive investment agreement to open up the Chinese market and eliminate discriminatory practices, but critics say it will in turn reward Beijing despite measures to suppress dissent in places ranging from Hong Kong to Xinjiang preferential access to European markets. Reaching an agreement would be a ‘symbolic victory’ for the Chinese side and could make it more difficult to forge unity in the transatlantic alliance on China.” It is worth noting that the German government, which has been accused of pushing hard for an investment agreement, has also recently repeatedly expressed its desire to present to Washington after the U.S. elections a proposal that would include a “new deal” for bilateral relations, which would include stronger coordination and communication with the U.S. side on relations with China.
For example, German Foreign Minister Heiko Maas previously told the press, “I very much hope that transatlantic relations will improve.” He said, “Even during the administration of President Obama, the U.S. and Europe had differences of opinion. But at that time, we talked to each other and consulted, especially when we had different opinions. Unfortunately, the current president (Trump) does not have that well-functioning consultation process. It undermines trust. And the beneficiaries of our disagreements ultimately fall on the heads of Moscow and Beijing. Therefore, we urgently need to restart the transatlantic relationship.” Moreover, Brussels has similarly delivered a consistent message to the outside world. For example, in a phone call with Biden last month after his election announcement, European Council President Charles Michel also invited him to rebuild a “strong transatlantic alliance” and to attend next year’s special EU-27 summit. A statement from Michel’s office said, “Michel proposed in the call to rebuild a strong transatlantic alliance based on shared interests and values.”
Analysts pointed out that then in the case of Biden’s team expressing the desire to consult with the EU side first on economic and trade issues with China, if the Brussels and Berlin authorities still hope to unilaterally rush to sign agreements with the Chinese side, does it show the slight hypocrisy of the EU’s unilateralist policy towards China in the past nearly four years criticizing the Trump administration and it is unwise to do so. In response, Polish Foreign Minister Zbigniew Rau publicly said via Twitter on Tuesday that more consultation and transparency is needed on the part of the EU. He suggested, “Get our transatlantic allies on board. A good, balanced agreement is better than an immature one” was the objection. The Polish Embassy in the U.S. also tweeted, “Transparency is a pillar of our democratic values. Any outstanding issues should be resolved by a strong transatlantic alliance to ensure that all parties benefit from this new investment deal.”
The FT 22 cited a source familiar with the Biden team’s position as saying that they are concerned about “forced labor” in China. The EU has been pushing for China to ratify International Labor Organization conventions, including those on forced labor, as part of the agreement, the newspaper said. Some human rights activists have expressed concern about allegations that China is forcing a large number of detained Uighurs in Xinjiang into forced labor. Reinhard Bütikofer, a German Green member of the European Parliament and vice chair of the China Relations Group, questioned on 22 May whether the EU should “give in on the issue of forced labor” and whether a broader agreement sends the “right signal. The European Parliament’s Committee on Trade, chaired by Mr. Bütikofer, questioned whether the EU should “give in on forced labor” and whether a broader agreement sends the “right signal. Bernd Lange, a German Social Democrat who chairs the European Parliament’s trade committee, said, “Trade policy is not conducted in a vacuum, and how the forced labor issue is addressed will determine the fate of the agreement.”
Separately, the U.S. political news site Politico reported the same day that a meeting between EU trade executive Valdis Dombrovskis and Chinese Vice Premier Liu He was scheduled for Tuesday morning but was postponed, according to people familiar with the matter. Ambassadors of EU member states also removed discussion of the China-EU Comprehensive Investment Agreement from their agenda at a meeting Tuesday afternoon. Some voices worry that an agreement without U.S. input could jeopardize the EU’s cooperation with the new Biden administration and its efforts to deal with China on everything from human rights to technical standards, the report said. Some EU member states have also issued warnings. Poland urged the EU not to rush and to cooperate more with Washington.
Some EU officials, however, said the EU-China investment agreement would give the Europeans the political leverage they need to work with the United States as equal partners on China. “If we manage to reach this agreement, it will put the U.S. and the EU on the same level,” said one senior diplomat. “Then we can deal with China together” because “the U.S. has an agreement with China, and we don’t have …… We are behind,” the diplomat said.
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