Brussels must develop a more active approach to dealings with Asia
The European Union’s recent investment agreement with China was at best one-sided. The deal handed Beijing a public relations coup. In return, the EU got terms that are hardly transformative for European businesses in China, let alone for the Chinese economic model.
The deal’s agreement in December brought criticism not just from Washington, but also from those in Europe who think the EU should take a tougher approach toward China. Yet there may be a silver lining — if that criticism prompts the EU to push forward with a badly-needed and more active approach to dealings with Asia in general.
Seven years in the making, the Comprehensive Agreement on Investment aimed to remove restrictions on EU companies investing in China, from ownership limits to mandatory joint ventures — and perhaps even create a much-vaunted “level playing field” between both markets. Although hailed by both Brussels and Beijing, the result fell a good way short of that goal. From Europe’s point of view it extracted neither major economic concessions nor much in the way of binding commitments in sensitive areas like human rights and labor standards.
So why the hurry to sign? The deal was a pet project of Germany’s Angela Merkel, as she prepares to leave office this year. Merkel has never entirely signed up to growing skepticism of China’s global role. Like many in Germany, she also remains sufficiently bruised by the Trump presidency to want to hedge Germany and Europe’s bets with Beijing. Germany had pledged to seal the deal prior to ending its COVID-battered 6-month presidency of the EU Council too.