EU-China Investment Agreement Text Published, but Questions Remain, Analyst Says

As the text of the EU-China Comprehensive Agreement on Investment was released Jan. 22, analysts are evaluating how much of a difference the agreement, if ratified, would make in the economic relationship between the parties to the pact. The Institut Montaigne, a French think tank that supports free markets, published a policy paper that said, “Overall, the EU-China CAI has been oversold and underpowered.” It noted that most of the annexes, that actually list the sectors in China that would be open to European investment, are still not published. Moreover, author François Godement said that there are qualifiers in the text that make some commitments unenforceable, such as China's pledge to pursue ratifications of International Labor Organization standards on forced labor.

“There seems to be no improvement on the US-China Phase One trade deal regarding forced technology transfer,” Godement said, and China's promises to be more transparent about subsidies should be eyed skeptically. “One only needs to look at the text of China’s 2001 accession protocol to the WTO as a reality check. For example, the text already included commitments on transparency, subsidies and state enterprises.” The agreement has to be ratified by the European Parliament, and that may be difficult, given China's actions in Hong Kong and the Xinjiang region, he wrote.