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The New EU-China Comprehensive Investment Agreement
On March 24, 2021, less than a week after the first US-China meeting of President Biden’s administration, American University Washington College of Law hosted a panel discussion on the Impact of the EU-China Comprehensive Investment Agreement on world trade. The panel discussion was moderated by Professor Padideh Ala’i, Director of International and Comparative Legal Studies and the Trade, Investment and Development Program. Professor Ala’i was joined by two prominent experts, Neysun A. Mahboubi who is a Research Scholar of the Center for the Study of Contemporary China at the University of Pennsylvania, as well as a Lecturer in Law at Penn Law School, and Charles Freeman, the senior vice president for Asia at the U.S. Chamber of Commerce. This timely conversation analyzed key sections of the draft agreement as well as concerns relating to issues of transparency, sustainable development, and human rights.
The text of the Agreement offers European companies access to Chinese markets and facilitates Chinese investment in Europe. In addition, the Agreement establishes rules preventing state assistance from undercutting competition, and sustainable development provisions. The parties consider that a better regulation of investment flows and the establishment of companies from one party in the territory of the other may enhance trade relations. In 2020, the EU imported goods worth 383.4 billion Euro, while it exported to China goods for 202.6 billion Euro, generating a negative trade balance of 180.8 billion Euro. This negative trade balance made the Agreement particularly attractive to Europe, as it would allow greater access for European producers to the Chinese market. In addition to these economic factors, the panelists analyzed how Brexit and other current events motivated that after seven years of negotiation, since 2013, the parties finally arrived at an agreement. The Agreement was announced in December 2020, after the Biden administration transition team had raised questions about the timing of this Agreement and after President-Elect Biden had promised to move away from unilateral action in the hopes of renewed cooperation with its European allies.
The panel discussion also came in the midst of additional rounds of sanctions imposed on China for violation of human rights. Sanctions were imposed by the U.S., EU, and UK due to China’s recent human rights record, especially in regard to the treatment of Muslim Uighurs in northwestern China, followed by retaliatory sanctions from the Chinese government. Most lately, these sanctions have de facto put on hold the ratification process. It will have to be seen how the relations between these two important trading blocks will work out.
For the full recording of the even, please view here.