China-EU investment deal: Joe Biden repeats call for ‘coordinated approach’ to handle Beijing
- US State Department urges ‘strong enforcement/monitoring mechanisms to ensure Beijing lives up to their side of any deal’
- ‘While the EU-China investment deal won’t derail US-China cooperation on China, it will undoubtedly complicate matters,’ says former US trade official
With commitments on market access, state subsidies and adherence to global labour standards, the EU accord is meant to address many of the concerns that human rights activists and industry associations have criticised China about. It aims to replace more than two dozen bilateral investment treaties between the alliance’s 27 member states and China, according to EU policy explanations.
Reflecting the hard-line stance that the Trump administration has taken, deputy national security adviser Matthew Pottinger criticised the EU-China talks, citing the Chinese government’s detention of Uygurs and other ethnic Muslim groups in Xinjiang, according to the Inter-Parliamentary Alliance on China.
“We can no longer kid ourselves that Beijing is on the verge of honouring labour rights, while it continues to build millions of square feet of factories for forced labour in Xinjiang,” Pottinger was cited as saying.
“Leaders in both US political parties and across the US government are perplexed and stunned that the EU is moving towards a new investment treaty right on the eve of a new US administration.”
Meanwhile, a representative at the US Department of State said Washington would call on the EU “to continue to insist on strong enforcement/monitoring mechanisms to ensure Beijing lives up to their side of any deal”.
“The United States and EU share many of the same concerns about the lack of a level playing field in China for foreign companies, forced tech transfer and IP theft, [military-civilian] fusion, and Beijing’s attempts to reshape global norms and standards in a way that disadvantages shared US and EU interests,” she said.
“Both the EU and the United States have tried to address these issues through various mechanisms, including negotiations,” the representative added.
00:42
‘Major progress’ made on China-EU investment deal negotiations, says Beijing’s foreign ministry
“The EU’s rushed deal with China will not go down well in the US, and underscores Biden’s challenge in enlisting European support for countering Beijing,” Peker said. “Sceptics in the US will see the CAI as evidence that the US should rely on unilateral tools.”
“The deal’s top two proponents –China’s President Xi Jinping and German Chancellor Angela Merkel – knew the window of opportunity would close at end-2020, with the expiry of Germany’s leadership of the EU Council,” Peker added. “Thus, Xi delivered concessions and Merkel the handshake – despite risks to an EU-US revamp and EP veto threats.”
Wendy Cutler, a former US trade representative official and frequent critic of the Trump administration’s unilateral approach to China, agreed.
“While the EU-China investment deal won’t derail US-China cooperation on China, it will undoubtedly complicate matters,” said Cutler, who is now managing director of the Asia Society Policy Institute’s Washington office. “As it seeks European Parliament ratification, which by no means is a given, the EU will need to promote and defend the deal rather than calling China out on its unfair trade, technology and investment practices.”
Not all agree that an EU-China investment accord will be a challenge for the US.
“Gaining market access to China with China’s concessions and commitments to environmental and labour standards is not bad,” said Wenchi Yu, an Ash fellow at Harvard’s Kennedy School of Government.
“The question should be how to hold China accountable to their commitments, given some of their broken records in the past,” said Yu, a former senior researcher for the Congressional-Executive Commission on China, a US government body that monitors human rights and rule of law developments in the country.
“It also tells us how much China can really make things happen, if they have the will,” she added. “That gives us more leverage in the future to push for further market opening up and compliance with international standards, including human rights.”
With so much in flux in terms of American leadership and the degree to which the EU-China negotiations will bring outcomes that Brussels wants, it may be too early to declare who has won and lost.
Yun Sun, director of the China Programme at the Stimson Centre, a think tank in Washington, said as much.
“Europe and US share a lot of interests, but also have major differences,” she said. “In this sense, a ‘setback’ may not be the most accurate description because it assumes that Europe and US share the same common ground and now Biden just needs to remind Europe of that.
“I’d rather say this is a realignment of positions and interests. It doesn’t mean China is the absolute winner and now US is the isolated, odd man out. But it does mean that China is not either.”
