Drawing connections between BIT, phase one trade deal makes no sense

By He Zhigao Source:Global Times Published: 2020/1/19 22:24:02

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It makes no sense to draw connections between the China-EU bilateral investment treaty (BIT) negotiations and the China-US phase one trade deal. 

The Europeans are unlikely to adopt hardline stances against China just because China and the US have signed a trade deal. However, taking a tougher attitude to China has been a tactic for the EU to open the Chinese market, with or without the phase one deal. 

Certainly, a China-US trade truce can weaken the EU's bargaining power amid the China-EU BIT talks, which could be a legitimate concern for the bloc with its high dependence on trade and investment. But there are deeper reasons behind the EU's tough attitude.

The EU would like to have a say in the multilateral trade system. If the trade framework between China and the US ends up being a bilateral one, the situation will be challenging for the EU. Thus, the EU will be nervous. If China and the US drift away from the WTO, there are limited numbers of measures the EU can take. 

Though the EU has signed multiple bilateral free trade agreements, it does not want to lose its position in making international trade rules. The EU also would like to maintain its ability to contest with the US, especially when the two sides also have trade disputes. Therefore, the EU would like to gain the upper hand in the BIT negotiations.

The author is a research fellow with the Institute of European Studies, Chinese Academy of Social Sciences. bizopinion@globaltimes.com.cn


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