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23rd Oct 2021

EU-China trade talks set for November launch

  • China is the EU's second largest trading partner behind the US (Photo: dolmansaxlil)

The EU will in November launch talks aimed at negotiating its first investment agreement with the Chinese government.

The plan - endorsed by MEPs on Tuesday (8 October) - seeks increased access for European businesses to Chinese markets in a bid to reduce China's trade surplus with the EU, worth €146 billion.

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EU trade commissioner Karel de Gucht said the start of investment talks were "important stepping stones towards building a mutually beneficial long-term relationship with China."

The commission wants to replace 26 existing bilateral agreements made between individual member states and China with a single rulebook.

China is the EU's second largest trade partner behind the US, with transactions worth €433.8 in 2012, but there is still little business investment between the two. Only 2 percent of the EU's foreign investment goes to China according to statistics agency Eurostat.

EU-China trade relations were "still far below what one would expect from two important economic blocs," said de Gucht.

However, Vital Moreira, the centre-left chair of the parliament's trade committee, said the mandate had to come with "strings attached."

He said the culture sector should be excluded from the scope of talks, a precondition demanded by France in July before the EU began similar trade talks with the United States.

Moreira added that a level playing field for investment, including rights for investors in China should be prioritised by the EU executive.

Meanwhile, deputies also voted to forbid goods coming from China's forced labour camps to be sold in the EU.

Although the parliament vote is not legally binding, its approval will be required for any deal to reach the statute books.

For his part, Iuliu Winkler, a centre-right deputy, urged the EU not to insist on excluding the cultural sector from the talks, arguing that Europe's expanding app market for phones and tablets could benefit from reaching Chinese customers.

"Now might be just the right time to refine the traditional EU position by acknowledging that, besides defensive interests, the European Union has also some offensive interests," said Winkler, adding that "the app market, which did not even exist a decade ago … now supports 800,000 creative and high-tech jobs in the European Union alone."

The launch of investment negotiations comes against the backdrop of increased economic tension between the two blocs.

EU frustration that China discriminates against foreign businesses has been heightened by a recent 'tit-for-tat' trade battle, during which Brussels and Beijing have slapped tariff barriers on products including French wine, solar panels and steel pipes. The commission has also threatened to seek WTO intervention against Beijing.

Trade ministers are expected rubber-stamp the commission's negotiating mandate later this month before the talks are officially launched at a special EU-China summit on 21 November.

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