Merkel’s last deal – with China, of all places

The EU and China have agreed on an investment agreement under the German Presidency. But many important details are still open, and human rights play only a secondary role.

Germany and the EU want to further develop the lucrative market in China and better secure investments. In addition, fair competitive conditions and equal opportunities for European companies are important, explained EU Commission President Ursula von der Leyen after a video conference with China’s head of state and party leader Xi Jinping.

The video call was arranged at short notice to seal the agreement on an investment treaty. Brussels and Beijing had been negotiating for seven years. However, it is only an agreement in principle; many important details are still open.

It would take several more months to finalise the deal, which among other things would end the compulsion for joint ventures in China, said an insider. A deal is not expected until 2022.

Better trade relations with China were a core concern of the German EU Presidency, which ends on Thursday. The fact that an investment agreement has now been reached after all is an economic policy success for Chancellor Angela Merkel.

She originally wanted to woo China with a special summit in Leipzig in September, but the meeting was cancelled because of Corona.

For Germany, the main goal is to secure investments in China and gain better access to the world’s largest market. According to the Federal Statistical Office, goods worth 206.0 billion euros were traded between Germany and China in 2019.

This means that the People’s Republic of China was Germany’s most important trading partner for the fourth time in a row.

Merkel was actively supported by two German women in Brussels: Commission President von der Leyen and Sabine Weyand, who heads the Directorate-General for Trade.

Political backing was provided by the head of the Conservatives in the European Parliament, Manfred Weber. “At present, China is threatening to be the big winner of the Corona crisis, and Europe must not become the big loser,” said the CSU politician.

Therefore, he said, it was necessary to do business with Beijing.

“Lip service on forced labour”

The last-minute deal – announced just one day before the end of the German EU Presidency – has angered the Greens.

The Commission offered “no plausible justification whatsoever for pushing this agreement through now with maximum year-end haste”, said MEP Reinhard Bütikofer.

On the issue of forced labour in China, Brussels “wants to be satisfied with superficial lip service”.

In the planned EU agreement, the leadership in Beijing commits itself to compliance with international labour protection standards. However, there is as yet no binding lever for implementation.

The human rights situation and repression in Hong Kong also argue against a quick conclusion, according to critics.

But Merkel has what she wants. France’s Macron also seems satisfied. After all, he was allowed to take part in the video call with Xi Jinping together with Merkel. The other 25 EU states were left out…

Translated with (free version) The original post (in German) is here