Germany is still putting pressure on a breakthrough this year, while the USA is slowing down and warning Europe against going it alone
In the darn seventh year of negotiations, it should come to a happy end after all – the dragging investment agreement between the EU and China. “Decisive progress” has recently been made, both sides recently said. And especially from the German side, there was increasing pressure to finally get the deal wrapped up.
For Chancellor Angela Merkel, an agreement on the agreement would be a huge success. She originally wanted to make the – difficult – relations between the EU and China the focus of the German EU Council Presidency. But the corona pandemic overturned Merkel's plans. What is the relationship between the EU and the world's second largest economy about?
The investment agreement is intended to improve the access of European companies to the Chinese market and to ensure fairer conditions of competition with the often state-sponsored companies. European entrepreneurs insist on both demands massively – they see themselves at a considerable disadvantage in the lucrative Chinese market, which is only accessible to them to a limited extent.
On at least two points, however, the negotiators are still far apart – and so the talks finally stalled again in the last few meters: on the protection of workers' rights and the recognition of the European investment protection mechanism by China.
Forced labor
Especially for the EU Parliament, which has to approve the agreement, these are impregnable hurdles: “Without ratifying the core standards of the International Labor Organization against forced labor, I cannot see how the European Parliament could approve an investment agreement with China,” warns the German Green MP Reinhard Bütikofer and chairman of the China delegation in parliament.
China, however, denies that there is any forced labor in the country. And there is one more requirement that the communist leadership does not seem to be able to enforce: the right to form trade unions.
The warnings from economic experts to the EU against hasty compromises negotiated under time pressure are correspondingly loud. The USA in particular reacted disgruntledly and warned against Europeans going it alone. The new US administration wants to consult with the Europeans again before final decisions are made. A breakthrough during the handover in Washington would be seen in Washington as a “symbolic victory” of the communist leadership in Beijing.
The director of the China Merics Institute in Berlin, Mikko Huotari, sees the agreement as only “modest progress in terms of equal treatment and more market access”. The overall geopolitical situation and the issues that had to be excluded “do not make it the agreement that Europeans wanted at the beginning of the negotiations seven years ago”. However, it would “actually give European companies new business options in China,” Huotari said.
