Eu China Investment Agreement
After 32 rounds of negotiations on the Comprehensive Investment Agreement (GIF), the main differences between the EU and China (in addition to sustainable development) were market access, including for financial services, until the end of September. In this context, the European Union`s objectives for its negotiating objectives are the concessions that China has made to the United States under the United States-China Economic and Trade Agreement (`Phase One Agreement`) signed on 15 January 2020. This commentary deals with how the EU and China reached an agreement 20 years ago, before China joined the WTO. This would not be the first time that a Sino-US bilateral agreement has hampered efforts between the EU and China to achieve their trade goals. For example, it took China two years to remove the objections mainly raised by the US (the legitimate right of a third party) to conclude the agreement on cooperation and protection of geographical indications between the EU and China. Nor would it be the first time that the EU and the US have competed for access to china`s financial markets. Both the EU and China wanted the agreement to be concluded soon and for economic cooperation between the two, which this year marks 45 years since the establishment of diplomatic relations, to be strengthened. Summary: Since January 2014, China and the European Union have been negotiating a comprehensive bilateral investment agreement. Unlike the EU-US negotiations for a Transatlantic Trade and Investment Partnership (TTIP), the ongoing negotiations between China and the EU have so far received little public attention. Nevertheless, a successful conclusion of these negotiations could also be very important beyond the investment relationship between the EU and China. This is the case for at least two aspects.
Firstly, a successful bilateral investment agreement could pave the way for a future free trade agreement between the EU and China. Secondly, the negotiations between the EU and China, beyond bilateral relations, can make an important contribution to the creation of a more liberal global investment framework. China is also negotiating an investment deal with the US, which is likely to take a form similar to that between China and the EU. In addition, provisions for the future liberalization of bilateral investment flows are also an important element of the TTIP negotiations between the United States and Europe. Rules and provisions, for example. B relating to market access, the prohibition of performance requirements or transparency vis-à-vis the public undertakings that are part of the three agreements, are “de facto erected as a global standard” (Berger 2014). In light of the above, this policy letter from Kiel analyses the main barriers currently facing Chinese and EU investors in the EU and China and provides a brief overview of how these main obstacles can be addressed in the EU-China Comprehensive Investment Agreement currently under negotiation. Clearly, the EU and China have a significant share of the other`s market; The conclusion of the CAI is therefore in the interest of both parties. On the Chinese side, China has not yet granted foreign treatment, one of the fundamental principles of the WTO, as promised.
Some of the market-opening measures recently put in place in its Foreign Investment Law (which entered into force in January 2020), such as participation in domestic industrial policies, government procurement programmes and activities, are granted to foreign-funded companies, not to foreign companies themselves. More importantly, while in recent years China has advocated for talks on a free trade agreement with the EU, it is worth recalling the EU`s two preconditions: “a good result” for the CAI and China`s progress on reforms that have a greater role to play in the market, including the creation of a level playing field. . . .