Brussels, 23/05/2013 (Agence Europe) - Commissioner Karel De Gucht is officially asking member states to negotiate with Beijing to reach a bilateral agreement on investment.
It may be pure coincidence or a matter of chance but this announcement by the European Commission comes right in the middle of a polemic over the risk of a trade war between the EU and China, since the Commission's decision to become firmer in its attitude towards Beijing. This can be seen, on one hand, by the decision to impose heavier import duties on Chinese solar panels that reap the benefits of dumping and subsidies, and, on the other hand, to investigate (without prior complaints being filed by the European industry) into the same disloyal trade practices that are to the benefit of the Chinese telecom equipment giants, Huawei and ZTE.
On Thursday 23 May, the Commission made official its proposal to negotiate with China on an investment agreement aimed at improving protection, especially legal protection, of European investment in China and, reciprocally, in the key technology sectors and with regard to intellectual property rights, and also to reduce obstacles to investment in China. The agreement envisaged must also cover better access to the Chinese market and tackle issues such as compulsory joint ventures.
The “EU-China investment agreement will help deepen our ties and sends the signal that we are firmly committed to building a strong partnership”, said Trade Commissioner Karel De Gucht, who gives his assurance that he “is looking forward to working with the new Chinese government to reach a deal”. Before all else, he should obtain the authorisation of the Council at which member states should grant him a mandate for negotiation.
The idea of launching these talks was floated during the EU-China summit in February 2012. Since then, however, China has not concealed its desire to go still further, expressing its idea of a free-trade agreement during the last bilateral summit held end September 2012. This is not a project that the EU is hoping for in the short term.
EU-China bilateral trade was worth $546 billion in 2012, with the EU notching up a deficit of $122 billion towards its partner last year. Investment flows between the EU and China, however, remain for their part below the potential of bilateral economic relations. EU foreign direct investment (FDI) in China totalled €17.5 billion in 2011, with China's FDI in the EU established at €2.8 billion the same year. “Although these figures are on the rise, this still represents less than 3% of both side' total FDI outflows. Hence, there is huge potential to further develop bilateral investment ties”, the Commission concludes. (EH/transl.jl).