Seven years of trade negotiations between the European Union and the People’s Republic of China ended with a Comprehensive Agreement on Investment (CAI) on 30 December 2020. “It will provide unprecedented access to the Chinese market for European investors, enabling our businesses to grow and create jobs. It will also commit China to ambitious principles on sustainability, transparency and non-discrimination” - said Ursula von der Leyen President of the European Commission.
Under the CAI, China is expected to provide easier access – especially on manufacturing – to its market for European investors while providing less strict rules for European companies in relation to the transfer of subsidies or forced transfer of technologies. Another part of the deal is that China committed itself to reduce forced labour and even has to adopt some of the rules of the International Labour Organisation’s fundamental Convention. The agreement also requires China to effectively adopt the rules of the Paris Climate Agreement, which is a great step, as China is the largest emitter of carbon dioxide.
The conclusion is the first step, as the adoption of the CAI and further finalisation work still have to be done. As part of the deal, the two parties have committed themselves to try to reach an agreement on dispute resolution and investment protection in two years’ time to even strengthen the effect of the CAI.