BRUSSELS (AP) — Top European Union (EU) officials and Chinese President Xi Jinping will conclude a business investment deal that will open big opportunities to European companies, but has the potential to irk the new American administration.
The EU said the seven-year-long negotiations will be concluded “in principle” during a videoconference involving Xi, European Commission President Ursula von der Leyen and EU Council President Charles Michel.
German Chancellor Angela Merkel — whose country holds the rotating presidency of the EU — and French President Emmanuel Macron will also take part in the discussions with the Chinese president, the EU said.
The videoconference will launch a ratification process that will take several months. To enter into force, the agreement will need to be ratified by the European Parliament.
According to the EU, the deal was brokered after China committed to pursuing ratification of the International Labour Organization’s rules on forced labour.
The EU hopes the agreement, known as CAI, will help correct an imbalance in market access and create new investment opportunities for European companies in China by ensuring they can compete on an equal footing when operating in the country. The 27-nation bloc said the agreement is the most ambitious that China has ever agreed with a third country.
But it has the potential to cause tension with the administration of United States (US) President-elect Joe Biden only weeks after the EU proposed a trans-Atlantic dialogue to address “the strategic challenge presented by China’s growing international assertiveness”.
The EU, however, said the investment agreement will give the EU the same level of market access in China that the US has and insisted that the deal will benefit other trading partners by getting China to commit to high standards of conduct.
The EU previously said the agreement, which includes provisions for settling disputes, should increase the transparency of Chinese state subsidies and make sustainable development a key element of the relationship between the EU and China. The deal also includes clear rules against the forced transfer of technologies, a practice in which a government requires foreign investors to share their technology in exchange for market access.