Deal with the ‘Dragon’: What Can Be the Repercussions of the China-EU Investment Agreement?
Soso Dzamukashvili, Contributor policy analyst, Central and East European Studies Specialist, M.A. from the University of Glasgow (UK)
Eter Glurjidze, Contributor policy analyst, postgraduate student at the Estonian School of Diplomacy and alumnus of the North China University of Technology
On December 30, 2020, in a joint virtual press conference between Ursula von der Leyen, Charles Michel, Xi Jinping, Angela Merkel and Emmanuel Macron, the European Union announced an investment agreement with China. After the video call, the European Union concluded a deal with China for their Comprehensive Agreement on Investment (CAI), which is planned to be ratified by the European Parliament in approximately a year.
The EU-China Investment Agreement is designed to be a vehicle aimed at solving the existing economic disbalance between the two actors and encompasses issues of market access and investment protection. It will open up space for more European investment in the world’s second-largest economy, leading to more employment both in the EU and China. Discussions for the agreement started in 2013 and it took more than 30 rounds of negotiations. While the agreement seems to be highly beneficial for both economies, several challenges, which mainly pertain to human rights issues in China, can stagger the EU’s credibility and undermine its core democratic values.
Picture 1. China-EU leaders’ virtual conference announcing the CIA Agreement (Source: China Global Television Network)
Overlooking Human Rights Issues for the Sake of Economic Benefits?
As the EU press declared after the online conference, the CAI is set to “bind the parties into a values-based investment relationship.” Considering the myriad challenges to human rights in China, not to mention the absence of democratic values and the rule of law, the agreement seems to be too optimistic towards Beijing, while it may damage the EU’s international credibility to human rights.
China is not part of the International Labour Organisations’ (ILO) Convention on forced labour and prohibits independent trade unions. Its western region of Xinjiang is known for its camps, where forced labour is actively exercised. Millions of ethnic minorities, such as Uyghurs and Tibetans, are deployed in various parts of China and are forced to labour as a cheap workforce for manufacturers, as cotton field workers or builders, and are not provided insurance or safety equipment. Some of them are sent abroad, even to the EU, to labour for car companies.
While the United States and the United Kingdom have fully banned Chinese agricultural products, cotton and other commodities produced under forced labour, the EU has not enforced any prohibition on these goods. Moreover, the EU-China deal is not designed to protect the labour rights of Chinese workers, who will be sent to the EU under the agreement. Even though the European Commission stated that under CAI, China will be “working towards the ratification of the outstanding ILO (International Labour Organisation) fundamental Convention”, there is no set deadline for Beijing to ratify the Convention. While some of the EU leaders, such as Angela Merkel, claim that the deal will lead to ‘a good balance’ with China, it can jeopardise the EU values for economic benefits, which might not be accrued. Due to the staffing practices of Chinese companies, which prefer employees from China to local workers, there is a low possibility that the deal will create new employment opportunities for EU citizens. Similar issues can be found in some Asian and African countries, where Chinese investment has not expanded employment opportunities and instead created so-called de facto outposts of Chinese workers.
Some members of the European Parliament expressed their disapproval of the ratification of the deal, although Ursula von der Leyen remains optimistic that the CAI will promote the EU’s interests and its values and will provide “a lever to eradicate forced labour” in China. Nevertheless, it is highly dubious that the Chinese Communist Party will agree to reform its labour rights or allow independent trade unions. Signing the CAI with China is a legitimacy for the Communist Regime in Beijing to keep practising mass-repressions against ethnic minorities and political opponents. And it may have a spillover effect on a global scale, sending a global message that undermining fundamental human rights can be rewarded with an advantageous trade agreement. The deal enervates the core democratic values that the EU stands for and may even impair its international credibility to defend human rights. This can mean a ‘blank cheque’ for the Communist Party to continue forcing ethnic Uyghurs and Tibetans into labour.
The Possible Impact on Transatlantic Relations
Despite the December agreement, the EU has not yet ratified the deal. While the labour issues in China have divided opinions among member states, the deal might further weaken cohesion inside the organisation, especially after Brexit. There is also a possibility that the transatlantic relationship between the EU and US, which has been predicted to deepen significantly under Biden’s administration, can actually face some difficulties as a result.
Biden’s administration has sought to work more closely with US partners in order to coordinate in dealing with China. Having been concluded right before Biden’s election, the CAI could end up as a challenge to closer EU-US cooperation with regard to China. Many believe that the agreement was led by EU decision-makers’ frustration towards the US-China ‘phase one’ trade deal. The CAI could have been an effort to bring the EU in parity with the US.
The deal was paramount for the Chinese Communist Party to inhibit greater transatlantic cooperation concerning Beijing. Thus, the CAI seems to have been chosen to be struck at the right moment, just before the end of the Council’s German presidency, which favoured the agreement, and during the transitional period in the US administration. It is worth noting that the CAI may be short-lived, should China not deliver on its promises. Additionally, after Merkel’s mandate, Germany may take harsher rhetoric towards Beijing. Other EU member states’ standpoints on China are also becoming more sceptical, especially after the breakout of COVID-19.
The EU follows a multi-directional policy towards China and simultaneously sees it as a partner, a competitor and a systemic rival. This approach raises the question of whether it is possible to separate these policy areas. Practically, it is difficult to divide trade and investment (China as a partner), from security and values (China as a systemic rival), and many question the EU’s capacity to deal with China through a single consistent approach.
From the long-term perspective, the EU requires further policy analysis towards Beijing, in coordination with the US. Unlike Trump’s ‘diplomatic vandalism’, Biden has aspired to bring allies to a roundtable to work toward a joint approach to China. Hence, the EU’s agreement should be followed by clear messaging from the US administration on the proposed cooperation regarding China. EU-US unified forces will have greater leverage over Beijing and may play a catalyst role, with a multilateral coalition of like-minded countries to defend core democratic values.
- How the Sino-American Competition Looks from Tbilisi
- A Looming Winter Energy Crisis in Europe: Can Azerbaijan Become the Continent’s Next Large Energy Supplier?
- Tajikistan’s Costly Chinese Loans: When Sovereignty Becomes a Currency
- The Russian Exclave of Kaliningrad and the Lithuanian "Sting"
- Czech Presidency of the EU: Time for Re-orienting EU Foreign Policy?
- What could be the cost of “Putin’s face-saving” for European relations
- Why the China-Kyrgyzstan-Uzbekistan Railway Matters More than Ever
- In line for the candidate status, Georgia will get a European perspective. What are we worried about?
- The break-up of the Hungarian-Polish coalition - an opportunity for the EU
- Failed Tskhinvali Referendum
- The War and Georgia
- "Autocratic Peace"
- “Rural Orbanism”- Polarization as a determinant for Hungary's political future
- Illegal Presidential Elections in the Tskhinvali Region: Why Bibilov Lost and What to Anticipate in Future
- How to Respond to Russian Ultra-Orthodox-Historic-Hegemonism?
- The War in Ukraine and the UK’s New Role in Eastern Europe
- What Will the Abolition of the OSCE Minsk Group Bring to the South Caucasus?
- The Presidential Election in France and Europe’s Political Future
- Will Pashinyan Be Able to Make a Drastic Turnaround in Armenian-Azerbaijani Relations?
- Why Has the Abkhaz Side Become More Active on Social Networks?
- Why a Neutral Ukraine Is Not on Putin’s Mind (Ukraine’s Neutral Status Is Getting Closer, but What Does It Mean to Putin?)
- Europe's energy future - challenges and opportunities
- Uncontrolled Mass Immigration and the Position of the Georgian Government
- Changes in Putin's propaganda narratives since the Russian invasion of Ukraine
- Ukraine will soon embark on a path of practical integration into the European Union. What about Georgia?
- Positions and Actions of Turkey in the Russo-Ukrainian War
- NATO’s possible expansion in Northern Europe and its significance for Georgia and Ukraine
- Political Winter Olympics in Beijing
- What Is behind Putin’s Sudden Gambit in Ukraine?
- Abkhazia in 2021: Energy Crisis, New “Minister” and Political Controversy
- L'Europe pourra-t-elle éviter le “déjà vu” ? (France, President of the Council of the European Union, and the Tensions in Eastern Europe)
- US-Russia Relations and the Issue of Ukraine
- The New Targets of Ramzan Kadyrov’s Regime
- What are the Prospects of the Eastern Partnership Summit Set on 15 December?
- The Upcoming EaP Summit - Why the Trio Initiative Should Finally Find Its Way
- What Will the Post-Merkel Era Mean for the EU’s Russia and Eastern Neighbourhood Policy?
- What Lies Behind the Growing Cooperation of the Georgian and Hungarian Governments
- “Doberman” as a Minister: Inal Ardzinba’s Prospects and Challenges
- The Belarus Crisis: How to Enhance Our Resilience Against the Russian Strategy for Its Near-Neighborhood
- Moldova’s Gas Crisis Has Been Russia’s Yet Another Political Blackmailing
- EU-Poland’s worsened relations and what it means for the EaP
- Lessons From Germany on Political Culture: What Georgia Can Learn From the German Parliamentary Elections
- Belarus One Year On: An Insecure Regime Under Russian “Protection”
- Why Did Iran-Azerbaijan Relations Become Strained?
- Russia’s Parliamentary Elections - What Can Be Said About the Regime’s Stability
- Six Key Takeaways from State of the Union Address - Too Little on EU Enlargement?
- An Emerging Foreign Policy Trend in Central and Eastern Europe: A Turn from China to Taiwan?
- Vaccination: “To Be, or not to Be”…
- Can Georgia use China to balance Russia?
- Sharia Patrols in Kabardino-Balkaria: A Growing Trend or a Local Conflict?
- Belarus’ exit from the Eastern Partnership and what to expect next
- Pacta Sunt Servanda: Agreements must be kept
- The West vs Russia: The Reset once again?!
- Associated Trio, What is Next?
- Formation of a New “Political Elite” in Abkhazia - Who Will Replace the Old “Elite?”
- The symbolism of the EU flag and why a true Christian would not tear it down and burn it
- Securitization of the Arctic: A Looming Threat of Melting Ice
- The Issue of Abkhazia and the Tskhinvali Region in the Context of NATO and European Union Membership
- (Re)Mapping the EU’s Relations with Russia: Time for Change?
- USA, Liberal International Order, Challenges of 2021, and Georgia
- The Political Crisis in Moldova: A Deadlock without the Way Out?
- Georgia's transit opportunities, novelties and challenges against the backdrop of the pandemic
- ‘Vaccine Diplomacy’: A New Opportunity for Global Authoritarian Influence?
- Georgia’s Application for European Union Membership
- Who did the judge sentence: Navalny, Putin or Russia?
- Biden’s Conundrum
- 2020 Developments in Abkhazia: “Elections,” the Pandemic and Deeper Integration with Russia
- The Hungarian Crisis: Is the EU Failing against Authoritarianism?
- Could Belarus Become a Prelude to the Great Polish-Swedish War 400 Years Ago?
- COVID 19 Pandemic Economic Crisis and Reducing the Instability of Georgia’s National Currency
- Some Thoughts on the Use of the Term „Post-Soviet Space“
- Georgia’s European Way During the Period of Pandemic Deglobalization
- Turkey's Caucasus Policy Against the Backdrop of the Latest Armenia-Azerbaijan Tensions
- Khabarovsk Krai Protests as an Indicator of the Russian Federation’s Stability
- Trio Pandemic Propaganda: How China, Russia and Iran Are Targeting the West
- Political Crisis in Occupied Abkhazia
- What is the Significance of Killing General Qasem Soleimani?
- What Will the New Dialogue Format with Russia Bring for Georgia?
- On the “Russian Culture Center” in Georgia
- Whither Economic Policy?
- Main Messages of Russian Propaganda
- Massive Cyberattacks On Georgia Calls For Defense And Resilience
- What do we know about the meeting of the Foreign Ministers of the Russian Federation and Georgia?
- New Focuses of the Anti-Occupation Policy
- Georgia's Problems are not Addressed at G7 Meetings: Who is to Blame?
- The Outcome of the European Parliament Elections - What Does it Mean for Georgia?
- Ten Years Since the Establishment of the Eastern Partnership
- Deterring Russia
- A New Chance for Circular Labor Migration between Georgia and the EU
- EU Soft Power and the Armenian [R]evolution
- Who Gets Russian Help?
- Is Georgia’s Export Growth Sustainable?
- Putin’s Visit to the Occupied Abkhazia: Was our Reaction Actually Adequate?
- Pence’s Visit to Georgia: Several Lessons and What We Should be Expecting
- Is it Acceptable for Georgia to Declare Neutrality?
- Georgia’s European Perspective in the Context of EU’s Future Evolution
- Brexit Negotiations between the European Union and the United Kingdom have been re-launched: What will be their Influence on Georgia?
- How to Stop the “Creeping Occupation”
- Kremlin’s Policy in the Occupied Regions of Georgia Moves to a New Stage
- Syrian Civil War in the Context of Regional Security
- The Winnable Second Round of Russia’s Neighbors’ Struggle against Its Imperialism
- Turkey’s Domestic and Foreign Policy in the Context of Regional Security
- Post-Soviet States – Struggle for the Legitimation of Power
- New Russian Weaponry in the Caucasus and Its Impact on Georgia’s NATO Aspiration