The EU and China are close to agreeing on a landmark business investment pact as Brussels seeks to improve the business prospects of EU companies in the Chinese market.
After meeting with national ambassadors in Brussels on Monday, the European Commission reported progress on talks with Beijing, while China also reportedly addressed concerns over the alleged use of forced labour on its farms. No further objections were raised and the commission is expected to formally announce that a deal has been reached this week.
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Why it matters: European officials said the pact would give EU firms better access to the Chinese market, improve competition conditions, and protect EU investment in China, according to Reuters.
• Discussions on an investment deal between the EU and China originally began in 2014, but were log jammed for years as the EU said China failed to follow through on promises to remove restrictions on EU investment.
• However, officials said growing tensions between the United States and China may have urged Chinese President Xi Jinping to reconsider his stance and seek to complete an investment deal with the EU.
• “The talks are about to be concluded. It’s looking good. There are only some minor details left which need to be hammered out,” an EU official told Reuters.
• The European Commission has handled all negotiations so far. The commission – which handles all external trade issues for the EU – is seeking to obtain the same access for EU firms that Chinese companies already have to the EU market.
More details: Under the terms of the deal, China would also open up its manufacturing sector to EU companies, as well as construction, advertising, air transport, maritime services, telecoms and, to a lesser extent, cloud computing.
• Additionally, the agreement will prohibit forced transfer of technologies by EU firms that establish themselves in China, and contain measures to regulate Chinese state-owned companies with regards to competition on the Chinese market.
• The EU is also pushing Beijing to reinforce respect for intellectual property and improve on climate commitments.
• China became the EU’s top trading partner in the third quarter of this year, as a result of COVID-19 heavily affecting the US economy.
• The deal still needs to be approved by the European Parliament, where some members are wary of China and could seek to gather opposition to the agreement, according to South China Morning Post.
Looking ahead: The EU has begun vaccinating its citizens across all of its 27 member states. Mass vaccination began early on Sunday.
• According to BBC, the EU has secured contracts for more than two billion vaccine doses from a range of drug companies, but has begun vaccinations with the Pfizer-BioNTech vaccine, which was developed in Germany.
• The rapid spread of a more contagious variant of the virus discovered in the UK has forced most of continental Europe to close its borders to British travellers. Several other nations, including Hong Kong and India, have also done the same.