Equally important is what the agreement does not include, including European access to the Chinese government procurement market, a strong dispute resolution mechanism or firm measures to prevent the use of subsidies that have caused so much dismay at the World Trade Organization.
On the issue of forced labor, China pledged to make continuous and sustained efforts to meet international standards, the same standards it promised to work for when the country joined the WTO 20 years ago.
For politicians like Butikofer, it rubs the nose of the EU. The European Parliament adopted a very clear and strongly worded resolution before Christmas, demanding that CAI provide guarantees against forced labor. This does not happen.
The agreement is also not certain to be ratified. The fact that 600 MEPs voted for this resolution is to say the least a major stumbling block, adds the MEP: then there are the geopolitical implications of concluding the deal right now, in this way. Helping Xi Jinping show Joe Biden the middle finger has also been the reason for much contempt and criticism. The way this was handled was wrong.
Divisions in Europe
The pressure came mainly from Germany, baffling other European capitals who wanted to hold back fire until Biden took office to present a united front against China with the new president.
According to Deutsche Bank, German automakers built more cars in China than in Germany in 2019, over 5m. China became Germany’s largest trading partner in 2016 and accounts for around a quarter of EU inbound investment in China.
After a year in which China quickly recovered from Covid-19, but temporarily overtook the US as the EU’s top trading partner, Chancellor Angela Merkels is determined to secure the deal before the end of the German EU presidency and his own mandate aligned X is anxious for a diplomatic coup.
Although the EU still sees China as a systemic rival, the realpolitik behind the deal has been reinforced by the UK’s harsher line on China in a break with the David Cameron-era court, highlighted by the ban of telecommunications company Huawei from 5G networks and ministerial condemnation of democratic repression in Hong Kong. It seemed like a tipping point to me, says Sam Lowe, researcher at the Center for European Reform.
Theresa Fallon, director of the Brussels-based Center for Russia Europe Asia Studies (Creas), adds: Now that the UK has Brexited, we see the growth of German power. It was largely led by Germany. You had a German rotating president in Merkel, a German president of the European Commission and a German director general for commerce in Sabine Weyland. All the stars were aligned so that it crossed the line.
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