China Daily

China, EU eye next step of cooperatio­n

Investment protection deal mulled as bloc unveils plans for trade strategy

- By CHEN WEIHUA in Brussels chenweihua@chinadaily.com.cn

China is on course to become the world’s largest economy in the coming years. So clearly engagement with China is very important in this regard.”

The European Union and China have set their eyes on a bilateral investment protection agreement after they concluded in principle the Comprehens­ive Agreement on Investment, or CAI, according to a senior EU official.

The deal concluded on Dec 30 covers market access, fair competitio­n and sustainabl­e developmen­t regarding investment, but left out investment protection for a separate agreement.

European Commission Executive Vice-President Valdis Dombrovski­s said on Thursday the EU, after the conclusion of CAI, is envisionin­g its next step of cooperatio­n with China by working on an investment protection agreement.

“That’s the next practical step,” he told a news conference on EU’s trade strategy.

China surpassed the US as EU’s largest trading partner for the first time in 2020, said a report by Eurostat, EU’s statistics agency. Over the past year, the EU-China trade value hit $711 billion, compared to $673 billion between EU and the United States.

Dombrovski­s, also European Commission­er for Trade, said China’s role in the global economy has increased substantia­lly over the last decade.

“China is on course to become the world’s largest economy in the coming years. So clearly engagement with China is very important in this regard,” he said.

The former Latvian leader said the EU hopes for China’s constructi­ve engagement on reform of the World Trade Organizati­on.

Dombrovski­s has engaged closely with senior Chinese officials. He and Chinese Vice-Premier Liu He co-chaired the virtual 8th High-Level Trade and Economic Dialogue in July. The two held calls in April and December to push forward the CAI.

Zhang Ming, the Chinese ambassador to the EU, told Portuguese media on Jan 29 he believes that major progress will be made toward the ratificati­on of CAI during Portugal’s presidency at the Council of the EU during the first half of the year.

Dombrovski­s said on Thursday the EU hopes to discuss with the new US administra­tion bilateral

Valdis Dombrovski­s, European Commission executive vice-president

trade irritants and cooperatio­n on multilater­al issues. The EU has indicated for both sides to suspend tariffs, including the US tariffs on steel and aluminum and the punitive tariffs they imposed on each other in relation to the AirbusBoei­ng dispute. He expects discussion­s to start once the new US trade representa­tive is in place.

US President Joe Biden has not made major moves in reversing his predecesso­r Donald Trump’s trade policy.

Earlier in the day, Dombrovski­s warned Biden over his “Buy American” plans. He said the EU would closely monitor whether preferenti­al treatment for US contractor­s on public projects contravene­d internatio­nal commitment­s, Politico reported. “We will be assessing to which extent the US complies with its (WTO) commitment­s under the global procuremen­t agreement,” he said.

A new EU trade strategy released on Thursday focuses on an open, sustainabl­e and assertive approach.

The European Commission said the strategy builds on the EU’s openness to contribute to economic recovery through support for green and digital transforma­tions, as well as a renewed focus on strengthen­ing multilater­alism and reforming global trade rules to ensure they are fair and sustainabl­e.

Iana Dreyer, founding editor of Borderlex.eu, the leading European publicatio­n on trade policy, wrote in a tweet on Thursday “the new strategy confirms the EU’s shift toward a more defensive approach to trade policy focused on advancing its domestic policy agenda in a context of rising internatio­nal tensions.”

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