Slow progress on the EU-China investment agreement negotiations amid political shock after resignation of the EU trade Commissioner
In 2013 the EU committed to a comprehensive strategic partnership with China. As part of it, negotiations for the EU-China investment agreement were formally launched in the same year in Beijing. The purpose of negotiating this agreement is to remove market access barriers to investment and provide a high level of protection to investors and investments in the EU and China markets.
Negotiations are taking place in the month of September 2020. However, there has been a growing perception in the EU that China’s market reforms have slowed down. As previously pointed out in the 2016 EU Strategy on China, in some areas such as State-owned companies and openness of the service sector, China’s progress has been slow. New restrictions have been placed on foreign operators in China, which go against market opening and the principles of equal treatment.
This perception is reflected in the recent declarations made by President von der Leyen in connection with a video conference between herself, the European Council President Charles Michel, German chancellor Angela Merkel and Chinese President Xi Jinping.
According to President von der Leyen China is not putting sufficient effort into concluding the EU-China investment agreement. She said: “we need [China] to move if we are to achieve our shared objective of finalizing negotiations this year. In other words, China needs to convince us that it is worth having an investment agreement.” In particular, the European Commission wants China to remove market access barriers. Von der Leyen stressed that the European investors “just face too many barriers in these sectors, and for us, on market access, it’s not a question of meeting halfway, but it’s a question of rebalancing the asymmetry.” European Council President Charles Michel also stressed that the EU wants “reciprocity and a level playing field” (see his remarks here).
The negotiations for a EU-China investment agreement are happening against the background of a political turmoil that shook the EU Commission after the EU Trade Commissioner Phil Hogan had to step down over the Golfgate scandal. President von der Leyen had to appoint Mr Valdis Dombrovskis , Executive Vice-President and Commissioner for An Economy that Works for People, to the role of EU trade Commissioner ad interim. As a consequence of this, the Irish government suggested that former MEP Mairead McGuinness be appointed EU Commissioner, taking over from Dombrovskis the portfolio Financial Stability, Financial Services and the Capital Markets Union.
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