By Eurasia Business News – December 31, 2020

The agreement in principle between the EU and China should promote balanced trade and provide opportunities to fight forced labor and jointly protect the climate, said Ursula von der Leyen, President of the European Commission.

View on a container terminal – Photo credit : Pexels

The European Union and China have just agreed on the main points of a comprehensive investment cooperation agreement, which aims to guarantee fair competition on the European and Chinese markets.

“Today, we have completed negotiations with China on the main provisions” of the investment agreement, European Commission President Ursula von der Leyen announced on Wednesday (December 30th).

The former German defense minister noted that the European Union, which has the “largest open market in the world“, is ready to cooperate in the field of trade and investment with the People’s Republic of China, but insists on fair conditions of competition, the principle of reciprocity and respect for its values.

In turn, the President of the European Council Charles Michel shared on Twitter: “The EU remains committed to rules-based international cooperation. We welcome the political agreement reached in the investment negotiations.”

The agreement between the EU and the People’s Republic of China is expected to contribute to more balanced trade opportunities, the head of the European Commission said after a video conference with Chinese leaders.

EU leaders had a strategic debate on China at the October European Council which was prepared by in depth consultation at EU leaders’ level.

The coming weeks will show if the negotiations can deliver on the expectations of the European Union.

Transparency of state subsidies, fight against forced labor and climate protection

At the same time, the agreement-in-principle implies greater transparency in the area of ​​government subsidies to Chinese companies and an end to the forced transfer of technology and other controversial practices from the People’s Republic of China, added President Von der Leyen.

In addition, this comprehensive treaty should provide the European Union with the opportunity to combat the practice of forced labour, take joint action to protect the climate and promote international cooperation based on common rules, said the head of the European Commission.

Read also : Asia-Pacific countries sign world’s largest free-trade agreement

The agreement provides that China “undertakes (…) to work for the ratification of fundamental conventions of the International Labor Organization (ILO), including those [prohibiting] forced labor” said the European statement.

Besides Ursula von der Leyen and European Council President Charles Michel, German Chancellor Angela Merkel and French President Emmanuel Macron, as well as Chinese President Xi Jinping, took part in the negotiations.

The European Union and China have been negotiating an investment agreement since late 2013. Critics of the agreement point to the difficult human rights situation in the People’s Republic of China.

Since Beijing launched its vast “New Silk Road” program in September 2013, trade between China and Europe has intensified.

Read also : China to become the largest luxury goods market by 2025

Among the effects of this logistical, commercial, economic and political program, the deliveries of goods from China have given new impetus to the development of European transport hub. One of them is the Europe’s largest river port in the city of Duisburg, Germany. While the traditional trade in steel and coal is in crisis, the growth of trade with China has created opportunities for this German port. Every week, around 30 Chinese trains arrive at a large terminal in the inner port of Duisburg. Their containers are either filled with clothes, toys and high-tech electronics from Chongqing, Wuhan or Yiwu. Before heading the other way, these containers are loaded with German cars, Scotch whiskey, French wine and luxury goods, and textiles from Milan.

Six weeks earlier, a group of 15 Asia-Pacific countries, including China, Japan and Australia, signed on November 15 a multilateral agreement creating the world’s largest free-trade zone, weighing for 2.2 billion people and 30% of world economic output ($ 26.2 trillion).

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