Brussels, 20/04/2016 (Agence Europe) - According to a study presented on Wednesday 20 April by the Foreign Trade Association (FTA - which represents the interests of European distributors and importers), the potential gains for growth and jobs in Europe from an EU-China free trade agreement are underestimated.
In the view of a study commissioned by the FTA from the Centre for European Policy Studies (CEPS), an EU-China free trade agreement would increase the combined GDP of the EU and China by $200 billion (€175 billion) by 2030 - in other words, the equivalent to the GDP of the Czech Republic. The agreement would have a positive impact on the economic growth of both China (+1.87%) and the EU (+0.76%).
The study (available at: http://goo.gl/knJR4A ) also shows that, as part of a free trade agreement, the EU's exports to China would enable over 2.5 million jobs to be maintained in Europe - including 1.1 million in Germany, and another 1.1 million in France, Italy, the Netherlands and the UK combined. The agreement would boost key European sectors exporting to China - such as machinery, automobiles, and electric machinery, which currently face very high customs tariffs on the Chinese market.
The study also notes that the free trade agreement could only succeed if China implements reforms - including on public enterprises and on opening up public procurement.
The study concludes that a deep and comprehensive free trade agreement between the EU and China would be a perfect fit for today's China, combining reforms and openness, whilst the EU could finally pursue the logical sequel in its trade policy with East Asia.
The EU and China are currently engaged in negotiations for an investment agreement. They set out the scope for this in January after several rounds of negotiations (see EUROPE 11469).
The future EU-China investment agreement is aimed at replacing the 26 bilateral agreements that currently exist between the EU countries and China with a single agreement guaranteeing the legal protection of investments for both partners, and ensuring reciprocal market access for investors from both sides.
During their last bilateral summit in June 2015, the EU and China confirmed that in the longer term, after the conclusion of an investment agreement, they planned on negotiating a free trade agreement if the conditions were right (see EUROPE 11347). (Original version in French by Emmanuel Hagry)