China made an investment treaty with the European Union a priority for a post-Covid world. It took seven years and dozens of rounds of negotiations before the two sides struck an agreement in principle last December. It was announced to great fanfare by Chinese and European leaders as one that could ultimately make a real difference, not only to the two economies but also global growth. It has been derailed by politics, with the European Parliament voting to freeze further discussions, putting it in limbo until Beijing lifts sanctions on EU officials, academics and researchers. These are in retaliation for EU action against four Chinese officials and one organisation over alleged human rights abuses in Xinjiang . The obstacles may seem procedural. But the European vote was overwhelming; and, in his first public reaction, Foreign Minister Wang Yi this week said the parliament was wrong to link human rights with trade issues and allegations of genocide were “lies”. So it is difficult to see the Comprehensive Agreement on Investment (CAI) going anywhere soon. That is regrettable. It is a missed opportunity for historic progress in Sino-European relations, with political gestures and grandstanding prevailing over substance. This is far from the pragmatic approach in the negotiations driven by Chancellor Angela Merkel of Germany. Ironically, under the accord now frozen, China had agreed to work towards ratification of United Nations conventions on forced labour – a key issue for the Europeans. That would be good for labour rights across China. Under the CAI, China would allow European businesses to operate in new sectors such as electric cars and telecoms. In the manufacturing sector, China agreed to remove joint-venture requirements and end the forced transfer of technology. It also addressed a major complaint of foreign investors by agreeing to remove preferential treatment for state-owned enterprises and to boost the transparency of subsidies and regulatory barriers. This reflects an incentive for the EU to reach a deal that would also open up Europe’s economy to Chinese investment. Wang Yi says EU parliament wrong to tie investment deal to Xinjiang The EU will increasingly become a source of technical know-how and new markets for China, as well as more investment openings. The mainland economy is growing again. After the pandemic the EU will need trading partners with open-ended growth potential to rebuild its own battered economy. China and European economies can seal bilateral deals that deliver some compensation with mutual benefits. But the CAI would have been a pillar of multilateralism and free trade against the rising tide of protectionism in some economies. By politicising it at the eleventh hour, European politicians have hurt their own side. It is important for both countries and the global economy that wiser heads find a formula for rescuing the CAI.