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Diplomat author Mercy Kuo regularly engages subject-matter experts, policy practitioners and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Dr. Alexander Vuving – professor at the College of Security Studies at the Daniel K. Inouye Asia Pacific Center for Security Studies and editor of “Hindsight, Insight and Foresight: Thinking about Security in the Indo-Pacific “(APCSS 2020)
– is the 254th in
“The Trans-Pacific View Insight Series.”
Explain the key outcomes of the EU-China investment deal.
On the penultimate day of 2020, to fulfill a pledge they made in 2019, the top leaders of China and the European Union struck the deal, which is officially called the “Comprehensive Agreement on Investment” (CAI). It was seven years in the making with 35 rounds of negotiations, and will replace the 25 bilateral investment treaties that individual EU members signed with China before 2009. These 25 pacts secured some market access and reduced some legal uncertainty for European investors in China, but they largely accommodated China’s restrictive and highly discriminatory investment regime. Now the CAI makes a step further to broaden the access and tighten the legal framework for European investors in the Chinese market, but it falls far short of achieving a “genuine level playing field” for European businesses and workers and ensuring reciprocity in market access, a major objective set out by the European Parliament in its 2018 resolution. The CAI goes beyond market access and investment protection to include provisions on environment and labor rights protection, but with regard to forced labor and labor rights, what it has secured is just China’s promises.