BOFIT Viikkokatsaus / BOFIT Weekly 2019/15

At the 21st annual EU-China summit held on Tuesday (Apr. 9) in Brussels, the parties signed a joint statement that said that they were committed to, among other things, supporting multilateral rule-based world trade and WTO reform including rules on government subsidies. Both the EU and China unequivocally rejected forced technology transfer policies.

Progress has been slow in negotiations on the EU-China Comprehensive Investment Protection Agreement which began in 2013. Now the joint statement affirms that the EU and China are committed to accelerate the process so that the agreement could be signed as soon as next year. The agreement would assure improved market access, elimination of discriminatory demands and practices on foreign investors and establish a balanced investment protection network. The EU considers approval of the investment protection agreement a precondition to starting free-trade talks. The parties also pledged to foster China’s accession to the WTO’s Government Procurement Agreement.

Both sides agreed that steel overcapacity and dealing with government supported export credit were global challenges. The parties will also seek to create synergy between the EU strategies on Connecting Europe and EU Trans-European Transport Networks and China’s Belt and Road Initiative in order to improve connections between Asia and Europe.

The EU has lately honed its China policies. This was clearly expressed in the strategy paper released by the European Commission last month (EU-China – A strategic outlook). This week it seemed that the EU might walk away from the joint statement if China failed to commit to concrete steps to solve long-standing trade-policy problems. While the nature of problems suggests they cannot be dealt with quickly, this time the parties managed to agree on tracking mechanisms to monitor progress in meeting their commitments.