SOURCE / ECONOMY
China-EU BIT can be achieved in phases: experts
Pandemic makes deal more urgent as both want to restore economic growth
Published: Apr 19, 2020 07:23 PM

This photo shows the Berlaymont Building, the European Commission headquarters, in Brussels, Belgium. (Xinhua/Zhang Cheng)



Negotiations over the China-EU bilateral investment treaty (BIT) are back on track and are expected to move forward rapidly, as the common goal of economic restoration and mitigating the effect of an unreliable US government has drawn the two closer, experts said. 

The treaty can be rolled out in phases to inject immediate momentum into the economic growth in the two sides, they said.

Experts noted that China is motivated to give more benefits to European firms than US ones given the current uncertainties in the China-US political relationship, but warned that the EU should not up the ante as the two sides negotiate, which would negate the previous two hard-won rounds of talks. 

In the latest progress, Chinese Vice-Premier Liu He spoke on the telephone with Valdis Dombrovskis, executive vice president of the European Commission Friday night.

During the call, Liu, also head of the Chinese side of the China-EU High-Level Economic and Trade Dialogue, conducted "constructive communication" with Dombrovskis, head of the EU side of the dialogue, over ways to step up cooperation in prevention and control of the pandemic, enhance macro-policy coordination and push forward the negotiations of the China-EU BIT, the Xinhua News Agency reported.

Dombrovskis, while describing the call as "useful," stressed commitment to finalizing negotiations on the China-EU investment agreement this year, noting that two will continue to work together to make this agreement a reality, Dombrovskis tweeted on Friday.

Experts interpreted the conversation as evidence of a strong willingness of achieving the agreement from both the two sides.

There are two main reasons for the two to accelerate the discussions, Cui Hongjian, director of EU Studies at the China Institute of International Studies, told the Global Times.

"On the one side, both China and EU are facing an urgent demand to restart their economies; on the other side, they also need to break the deadlock with the US. The EU may not find the US as reliable a partner after the pandemic, and the second-phase of the China-US trade talks may not kick off soon," Cui said.

"It indicates that China will be more motivated to give more advantages to EU firms than US ones in China - which has been a sticking point in the negotiations over the past years, in a bid to push forward the negotiation," Cui said.

"The China-EU BIT talks seem more promising than the second phase China-US trade deal amid the COVID-19 pandemic," Cui added.

However, experts noted that though negotiations are gaining momentum, talks between have been delayed due to the pandemic, meetings are reduced and as face-to-face talks are impossible at the moment, it is uncertain whether the talks can be concluded as scheduled by the end of the year. 

"We are also worried that EU may increase its demands and become conservative in the talks, which will push the two away from the negotiation table, prolonging the process and creating more barriers to achieving a consensus by the end of 2020,"Cui said.

Division among high-level EU officials under the impact of the pandemic could impact the climate of future negotiations between the EU and China, according to Stephan Ossenkopp, a Berlin-based expert associated with the Schiller Institute, an international think tank.

"Member countries are now more polarized than ever on the EU's financial instruments and policies," Ossenkopp told the Global Times on Sunday.

Some EU officials are reportedly proposing measures to bar Chinese companies from acquiring EU companies. The Financial Times reported previously that Margrethe Vestager, an executive vice president of the European Commission, has called for member countries to buy stakes in companies to stop "the threat of Chinese takeovers."

As time is urgent and barriers remain, Cui proposed the two could achieve the BIT by agreeing to phased packages to ensure a stable supply chain and quickly revive the economies in China and the bloc amid a slowing global economic outlook.

The progress in the China-EU BIT talks comes as the Chinese government and enterprises have donated batches of medical supplies to Europe during the pandemic. Europe also sent China tons of supplies at the peak of its virus crisis.

"We appreciate China's readiness to help EU countries with medical equipment needed to fight the coronavirus. We agreed to work together on keeping supply chains open for critical personal protective and medical equipment," Dombrovskis said on Twitter on Friday.


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