European lobby group in China urges EU to sign Beijing deal

European lobby group in China urges EU to sign Beijing deal


EU leaders should sign a business investment agreement with China despite opposition to the pact from European MPs and members of the incoming Biden administration, according to the head of the European Chamber of Commerce in China.

On Tuesday, Jake Sullivan, whom President-elect Joe Biden has selected as his national security adviser, said the new administration would welcome discussions with the EU on “our common concerns about China’s economic practices”.

Critics of the China-EU Comprehensive Agreement on Investment, which is nearing completion after seven years of negotiations, said it would hand President Xi Jinping a strategic victory on the eve of Mr Biden’s inauguration.

They said the deal did not address concerns about the use of forced labour in the world’s second-largest economy, especially in the northwestern region of Xinjiang.

The pact’s supporters argue that it offers important concessions to EU companies less than a year after President Donald Trump signed a “phase 1” trade agreement with China that contained many market access provisions for US firms. Last month Australia, New Zealand, Japan and South Korea joined the Regional Comprehensive Economic Partnership trade pact with China and members of the Association of Southeast Asian Nations.

“There’s real beef in it and it does not make sense to wait for Biden,” said Joerg Wuttke, head of the European Chamber of Commerce in China. “The US didn’t wait for us for their phase 1 trade deal.

“Beijing wants this deal now,” he added. “They want to show the Biden administration they can conclude trade deals with their other major trading partners.”

The Mercator Institute for China Studies, a German think-tank, noted that the CAI would provide more business opportunities for EU companies in financial services, telecommunications, new energy vehicles and other sectors.

“EU negotiators have delivered for European business as the agreement potentially improves on a difficult status quo,” said Mikko Huotari, Merics director. “For Beijing, the agreement would provide it with a highly symbolic political win . . . [and] complicate transatlantic rapprochement on China policy.”

Over the past four years, the EU and other US allies have been frustrated by the Trump administration’s determination to pursue trade wars against them rather than forge a united front to respond to China’s growing economic and geopolitical clout.

“Thirty per cent of global growth over the next 10 years will come from China,” Mr Wuttke said. “Do we want to be part of this or not?”

Mr Wuttke also argued that critics of the CAI on labour and human rights grounds overestimated the EU’s ability to secure concessions from Beijing at the negotiating table.

“Australia, Japan and Korea signed RCEP without [labour provisions] so how come we are trying to force China to accept our way of living and jeopardise jobs at home for it?” he asked.

“Do we want to feel better or do we want to trade better? We have to get real about how much can we shape China.”



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