Trade deal with the EU: How credible are China’s pledges?

The EU Commission sees a breakthrough in the investment agreement with China. Companies should find it easier to enter the Chinese market and working conditions should be improved. But there are doubts about China’s commitments.

By Helga Schmidt, ARD-Studio Brussels

Almost nothing moved for seven years. Negotiations between the EU and China on an investment agreement did not progress. Then it suddenly happened very quickly. In mid-December there were initial speculations about a possible agreement, and one day before New Year’s Eve, the video link between Beijing, Brussels and Berlin with the news that was surprising even for observers: the EU-China investment agreement was in place.

Merkel is pushing the agreement

The driving force was the German Chancellor. She wanted to get the agreement wrapped up before the end of her council presidency. More cooperation with China – for Angela Merkel this was one of the most important goals in the German Presidency. “The EU has a great strategic interest in actively shaping its cooperation with China, one of the key players of this century,” said the Chancellor shortly before the beginning of her Council Presidency in the summer in a foreign policy statement of principles at the Konrad Adenauer Foundation .

She also mentioned the ongoing human rights violations in China, in passing: “This fact that we are very fundamentally divided should not be an argument against cooperation. Especially not at a time when the conflict between the United States and China is intensifying experience.”

The confrontation with China had taken US President Donald Trump to extremes. But his successor Joe Biden will not change the course. On the contrary: in Brussels there is open discussion about how Biden’s employees tried for weeks to prevent the Europeans’ China Agreement. Biden wanted to put more pressure on China, along with the Europeans. Turning a new page in the transatlantic relationship – it would have been possible against the systemic rival China.

Magnet for European companies

Under German leadership, the EU made a different decision. Why? China and 14 other countries in the Asia-Pacific region had just founded the world’s largest trading bloc and showed the Europeans that the future of the international economic order will be decided in Asia. Would the EU be left behind?

China attracts with the world’s largest market, it is also the fastest growing market – a magnet for European companies. The agreement should make it easier for them to invest and produce in China. The Chairman of the Trade Committee in the European Parliament, the Social Democrat Bernd Lange, believes that there have been concessions on the Chinese side: “It is important that state-owned companies are no longer given preference, that subsidies are transparent and that complaints are made and that there is also no forced technology transfer will give more. “

Criticism on the subject of working conditions

But there are also doubts about the agreement. The European Employers’ Association says that the structure of China’s system will not change as a result of the agreement. The criticism of working conditions is even more intense. Beijing only announced that it would aim to join the international convention against forced labor – they did not want to set a date

For the Green politician Reinhard B├╝tikofer, this is “just a polite diplomatic paraphrase for the brutal rejection: Leave us alone, we won’t do that.” The head of the China delegation in the European Parliament believes it is wrong that the EU has not asked for any guarantees against forced labor. The background is reports that Beijing barracks Muslim Uyghurs in forced camps and forced them to work. Possibly also for European companies. In addition to the Greens, other groups are calling for changes. That could be decisive, because in the end the European Parliament has to approve the investment agreement, emphasizes B├╝tikofer: “There is no deal until the European Parliament has said a deal.”

Agreement after deal between Berlin and Paris?

Criticism of the agreement comes not only from parliament. During the video conference with China’s President XI Jingping on the day before New Year’s Eve, it was noticed that France’s President Emmanuel Macron was involved. In terms of protocol, there was actually no reason for this – the 27 member states were already represented by the German Chancellor. Still, Macron wanted to be there. He is more critical of human rights violations in China than Chancellor Merkel and had his trade minister say that beforehand: “We are more determined than ever,” said Trade Minister Riester, “to ensure more justice and more fairness in globalization and our values defend”.

Politico, the mostly well-informed Brussels news portal, then provided an explanation for the unusual video switch. There was a deal between Berlin and Paris. And it looked like the Chancellor was just able to announce the political agreement with China in her Council Presidency, but that the text of the treaty is still being worked on in detail and will then be signed at the beginning of 2022 at the earliest. Then France will hold the Presidency of the Council of the European Union.

Tagesschau reported on this topic on December 30, 2021 at 8:00 p.m.

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