EU clears way for China investment pact

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BRUSSELS (AFP) – EU member states gave political backing to Brussels’ planned investment pact with China on Monday, clearing the way for a deal between the world’s biggest economic blocs.

At a meeting of ambassadors, the German EU presidency noted that no member had “raised a stop sign and the way for a political endorsement was thus cleared”, a diplomat said.

The diplomats noted “recent positive developments” in negotiations, with China reportedly addressing concerns over the alleged use of forced labour on its farms.

This came after the Chinese foreign ministry said last week that “negotiations have entered the final stretch” — and a second EU diplomat said an agreement could now be formally announced this week.

“We have to be careful, but as long as China is in agreement, there could be an official announcement from Brussels and Beijing by the end of the week,” the senior envoy said.

No member state intervened at the meeting to block the accord, but afterwards Poland’s ambassador Andrzej Sados said he had “expressed our doubts” after Germany added it to the agenda.

The deal would be a major boost for both sides and strengthen economic ties between the giants before the arrival of US president-elect Joe Biden in the White House in January.

Outgoing US leader Donald Trump has engaged in a trade war with China but his successor has also expressed concern about the EU outreach, with his team urging Brussels to consult with Washington.

“The new administration in the US is starting work in three weeks… and an agreement with China should take into account the EU’s relations with the US,” Sados told the Polish PAP news agency.

“We also said that we shouldn’t act too hastily after seven years of tough negotiations. Meanwhile, such an item is suddenly added to the EU ambassadors’ meeting agenda in Brussels. This is unheard of.”

“In the last days of the German presidency we are dealing with a sudden and unjustified acceleration regarding a very important issue, which concerns international relations.”

The bloc’s leading economic power Germany, which holds the rotating EU presidency until the end of the year, has made securing the deal a priority of its time at the helm.

The European Commission, the EU executive, had said before Christmas that the draft of the “political agreement” was “95 percent ready” and just needed the capitals’ green light.

China’s commitment to labour rights had remained a hurdle, but Europe has long sought greater access to the huge Chinese market for its companies.

– ‘Systemic rival’ –

The head of the EU chamber of commerce in Beijing Joerg Wuttke told this month that negotiators had “apparently made great strides on market access”.

As part of the accord the EU has also been pushing Beijing to reinforce respect for intellectual property, end obligations to transfer technology, reduce subsidies for public enterprises and improve on climate commitments.

While Trump’s administration has engaged in a war of words with Beijing, Brussels has taken a balanced approach.

The EU states treat China as a “systemic rival” and have expressed concerns over China’s rights record, especially its clampdown in Hong Kong and treatment of the Uighurs.

Berlin wanted to get the agreement signed off at a joint EU-China summit in September, but the coronavirus pushed the event online and no deal was signed.

China pushed past the United States in the third quarter of this year to become the EU’s top trade partner, as the Covid-19 pandemic disrupted the US economy while Chinese activity rebounded.

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