European Parliament “freezes” trade deal with China over sanctions | European Union
The European Parliament voted by an overwhelming majority to “freeze” any consideration of a massive investment deal with China, following recent tit-for-tat sanctions on Beijing’s treatment of its Uyghur population in the province of Xinjiang.
According to the resolution, parliament, which is due to ratify the agreement, “demands that China lift sanctions before parliament can process the Comprehensive Investment Agreement (CAI).” Some MEPs have warned that lifting the sanctions alone will not guarantee ratification of the deal.
The vote on the motion was adopted by a landslide, with 599 votes in favor, 30 against and 58 abstentions.
Thursday’s result is another sign of the deterioration of China-EU relations, and is not surprising to observers of diplomatic relations.
“The European Parliament has always been a more critical voice on China in the past. He is now in a position to wield more power to vote against any trade and investment deal on the grounds of political conditionality, ”said Yu Jie, senior researcher on China at London-based thinktank Chatham House.
This massive trade deal was the result of seven years of marathon negotiations. The final talks were closed late last year by Chinese President Xi Jinping, alongside European leaders such as Germany’s Angela Merkel, Frenchman Emmanuel Macron as well as European Commission President Ursula von der Leyen.
If ratified, it could lead Beijing to relax some of its notoriously strict rules on foreign companies, such as the need to operate through joint ventures with local partners.
Analysts said Beijing’s economic planners had hoped to use the deal as an opportunity to push for domestic reform, although the implications of the CAI for the Chinese economy remain unclear.
The deal was controversial from the start in Europe. Even before the negotiations were concluded, Chinese skeptics as well as human rights activists had long urged Brussels to prioritize the issue of human rights in its relations with Beijing.
Then, in a dramatic turn of events in March, the European Union imposed sanctions on four Chinese officials involved in Beijing’s Xinjiang policy. In response, China quickly imposed counter-sanctions that targeted several high-level members of the European Parliament, three members of national parliaments, two EU committees and a number of European researchers focused on China.
Chinese Foreign Ministry spokesman Zhao Lijian on Wednesday urged the EU to “think carefully and immediately stop interfering in China’s internal affairs.”
He added, “The CAI is a balanced, win-win deal that benefits both parties, rather than a ‘gift’ or favor given from one side to the other. Swift ratification of the agreement is in the interests of both China and the EU. “
Thursday’s move comes after European Commission Executive Vice President Valdis Dombrovskis said earlier this month that political awareness to promote the controversial trade deal had been “ on hold ” after the recent sanctions.
The conclusion of the initial CAI negotiations last December was reportedly aided by German Chancellor Angela Merkel. The Chinese market is particularly important for German automakers and manufacturers who have a strong presence in the country.
German Economy Minister Peter Altmaier maintained his defense of the investment deal. He said China is the EU’s largest trading partner and plays an important role in the global economy. “We want to achieve results with China that are in the interest of both parties,” he added.
But Yu Jie of Chatham House in London said it would now become “increasingly difficult” to push through the deal after Merkel left in September. In the meantime, the mood in Brussels is also changing, with the discourse on ‘strategic autonomy’ becoming an essential part of Brussels’ foreign policy discourse.
“Any chance of saving the CAI will now require major political will on both sides, but neither seems to want to speak quietly at this point.”