EU-China reach agreement on investment
China - EU - Image © simonalvinge - Fotolia
(BRUSSELS) - Following intensive negotiations carried out by the European Commission, the EU and China concluded in principle at the end of 2020 negotiations for a Comprehensive Agreement on Investment (CAI).
The EU was represented by Council president Charles Michel and Commission chief Ursula von der Leyen, while China was represented by President Xi Jinping.
The agreement is of major economic significance and binds the parties into a 'values-based' investment relationship grounded in sustainable development principles. Once in effect, the CAI will help rebalance the trade and investment relationship between the EU and China.
China has committed to an unprecedented level of market access for EU investors, giving European businesses certainty and predictability for their operations. The Agreement will also significantly improve the level playing field for EU investors by laying down clear obligations on Chinese state-owned enterprises, prohibiting forced technology transfers and other distortive practices, and enhancing transparency of subsidies. EU companies will henceforth benefit from fairer treatment when competing in the Chinese market.
The Agreement also includes important commitments on environment and climate, including to effectively implement the Paris Agreement, and on labour standards. China has committed to effectively implement ILO Conventions it has ratified, and to work towards the ratification of the ILO fundamental Conventions, including on forced labour.
On the EU side, further work will now be undertaken in accordance with its legal rules and procedure to sign, ratify and conclude the Agreement. The two sides will aim to conclude negotiations on investment protection within two years of the signature of CAI.
Ensuring successful implementation of this Agreement once concluded will require high level and sustained political engagement with China. The Agreement also provides for a robust enforcement and monitoring mechanism .The European Commission will monitor the implementation of the commitments in the Agreement on the EU's side.
The EU will take stock of the overall development of EU-China relations, including but not limited to the CAI and its implementation in all its dimensions, during the French Presidency in 2022.