Brussels (Brussels Morning) Rising diplomatic tensions between China and the European Union seem to have put on hold the promising China-EU investment deal agreed late last year, Deutsche Welle reports.
The EU-China Comprehensive Agreement on Investment (CAI) was intended to provide a stable framework of conditions for trade and investments in their respective markets. It was finally signed in December, following seven years of negotiations, and hailed at the time as marking a significant improvement in Beijing’s economic relations with Brussels.
The agreement still requires ratification by all 27 member states and by the European Parliament, where it faces massive opposition since Beijing imposed retaliatory sanctions against several MEPs in response to EU sanctions on Chinese entities and individuals linked to human rights abuses in China’s Xinjiang province.
European Commission vice-president Valdis Dombrovskis told AFP on Tuesday that further efforts to win Parliament’s approval for the deal have been effectively put on ice. “We now in a sense have suspended political outreach activities from the European Commission side”, Dombrovskis told the new agency.
“It’s clear in the current situation with the EU sanctions in place against China and Chinese counter-sanctions in place, including against members of the European Parliament (that) the environment is not conducive for ratification of the agreement”, Dombrovskis added.
A Commission spokesperson confirmed for DW that the ratification process had yet to begin, and that in any case it was subject to a legal review. The spokesperson noted the process was currently paused “as it cannot be separated from the evolving dynamics of the wider EU-China relationship”. As far as the EC was concerned, the Chinese retaliatory sanctions were “unacceptable and regrettable”.
If it does come into force, the CAI deal would offer EU companies easier access to Chinese markets, while also facilitating Chinese investment in Europe. The agreement would also establish level playing field rules that would prohibit either side from providing state assistance to its companies in a manner that would undercut competition.