Negotiations took place for seven years, and now China and the EU have announced that they have fundamentally agreed: An investment agreement should make trade fairer. What’s in it And where are the hooks?
By Stephan Ueberbach, ARD-Studio Brussels
The new EU-China deal is neither a free trade agreement nor an investmentprotectionagreement, but it regulates the access of European companies to the Chinese market and vice versa. The EU Commission is convinced that the agreement will significantly improve the chances of Europe’s economy and points out that the leadership in Beijing has made major concessions in three important areas.
Firstly, companies from the EU should be able to invest in China much more easily than before, across all important areas – from the automotive industry to air travel and cloud services to the energy, finance and health sectors.
The so-called “joint venture obligation” is largely eliminated. European companies no longer have to team up with Chinese partner companies and share their technologies. This would also protect intellectual property better.
Environmental and social standards
Second, the agreement aims to ensure a level playing field. So far, the state-owned Chinese companies have had clear advantages, also because they are fed with subsidies through opaque channels.
And thirdly, the agreement stipulates that China will adhere to international sustainability standards, for example in the environmental or social area. This should especially apply to the working conditions of the Chinese employees.
Will it be ready for signature in a year?
The leadership in Beijing also promises to work to implement rules against forced labor. Disputes should be settled by arbitration tribunals. In return, China gets more legal certainty for its investments in the EU.
The contract now has to be translated into the official European languages and checked by the lawyers. It will therefore take a long time before the agreement is actually ready for signature – up to a year is talked about in Brussels.
The European Parliament must also agree. Many MEPs are demanding significant improvements because the agreements do not go far enough for them, especially with regard to workers’ rights and the fight against forced labor.