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On December 30th, the EU and China approved a comprehensive investment agreement, despite a request for talks on the issue by the incoming administration of President-elect Joe Biden.
Chinese President Xi Jinping, German Chancellor Angela Merkel and French President Emmanuel Macron joined EU leaders Ursula von der Leyen and Charles Michel in a video conference to conclude negotiations over the deal, which removes a number of barriers to European companies’ investment in China.
We will improve the status quo for a fairer treatment of our companies:
➡Transparency on subsidies & disciplines on 🇨🇳 state owned enterprises
➡More market access, certainty & predictability for EU businesses
➡No more forced technology transfers & other distortive practices
— Ursula von der Leyen (@vonderleyen) December 30, 2020
This deal was years in the making, and the US was apparently entirely left out.
Negotiations had repeatedly stalled since they began in 2013.
According to reports, Chinese negotiators had a sense of urgency after Biden was elected and attempted to close it, successfully as it seems.
The deal is a diplomatic victory for Beijing and a domestic one for President Xi Jinping.
In Washington, it will be seen as a snub to the incoming Biden administration, which urged the EU to wait.
“Before President Biden has even taken the oath of office, the well has been a bit poisoned in transatlantic relations,” said Theresa Fallon, director of the Centre for Russia Europe Asia Studies, a think tank in Brussels.
The deal has also been criticized by politicians in Europe because of concerns over forced labor and other human rights abuses in China, and for preempting any discussions with the Biden administration on a joint approach to Beijing.
“After four years of the Trump administration, which characterized the EU as ‘worse than China,’ there is a growing anti-American sentiment” among EU leadership, Fallon said, “meaning ‘we don’t want to do what the U.S. says.’ “
Chinese Foreign Ministry spokesperson Hua Chunying tweeted that the agreement “demonstrates China’s determination and confidence to advance toward a higher level of opening up.”
The main focuses of the deal are the following:
- Provide for new opportunities and improved conditions for access to the EU and Chinese markets for Chinese and EU investors (more specifically, broadening the EU investors’ access to the Chinese market by eliminating quantitative restrictions, equity caps, or joint venture requirements);
- Address key challenges of the regulatory environment, including those related to transparency, predictability, and legal certainty of the investment environment (with reference to the Chinese market, by allowing EU investors to have access to information affecting their business, but also giving them opportunity to comment on relevant laws and regulations, as well as ensuring clear, fair, and transparent procedures);
- Establish guarantees regarding the treatment of EU investors in China and of Chinese investors in the EU, including protection against unfair and inequitable treatment, unlawful discrimination, and unhindered transfer of capital and payments linked to an investment;
- Ensure a level playing field by pursuing, inter alia, non-discrimination as a general principle subject to a limited number of clearly defined situations;
- Support to sustainable development initiatives by encouraging responsible investment and promoting core environmental and labour standards;
- Allow for the effective enforcement of commitments through investment dispute settlement mechanisms available to the contracting Parties and to investors.
Outspoken Belgian MEP Guy Verhofstadt has warned the Comprehensive Agreement on Investment will not be ratified by the European Parliament.
He wrote on Twitter:
“Arrests again show that China is not becoming more open & democratic as a result of international agreements. EP [European Parliament] will never ratify the China Comprehensive Agreement on Investment without commitments & proof that the human rights of Hong Kongers, Uyghurs & Tibetans improve.”
It is unlikely that the deal will not pass, and it being negotiated between China and EU’s leadership is showing that the internal strife in the US and the uncertain policy – both internal and international, are a chance for the development of a more multipolar global system.
The United States’ censorship, and questionable developments in the last few weeks are creating conditions for the further fracturing of the “Western world”, and the increasing influence of “alternative centers of power” such as China.
Turkey’s unilateral activity that began in 2019 and is continuing is evidenced of that, a NATO founding member, purchasing military equipment from Russia, and generally following its own agenda in a clear fracture.
Furthermore, recently the US officially abandoned the One China Policy, under the Trump administration.
On January 9th, Secretary of State Mike Pompeo announced that he’s now lifting “self-imposed restrictions” on the relationship between the United States and Taiwan. He announced in an official statement:
“Today I am announcing that I am lifting all of these self-imposed restrictions. Executive branch agencies should consider all “contact guidelines” regarding relations with Taiwan previously issued by the Department of State under authorities delegated to the Secretary of State to be null and void.”
This is likely to cause further strain, since no country in the EU openly opposes or even comments on China in regard to Taiwan.
The United States influence is currently waning, partially due to the global economic crisis and the shift of the global balance of power. At the same time, what little faith of globalists there was left in Joe Biden salvaging the situation appears to be also vanishing, and as such a chance appears for China, and even Russia to move forward and fill the gap on the global scene.
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