In a scoping paper prepared by Dr. Jessica Lawrence and commissioned by the Heinrich Boll e.V. Foundation, we focus on an international investment contract on the potential risks to the EU by anchoring rights for Chinese investors in Europe. We focus on these “defensive” interests because investment contracts in essence restrict a state`s ability to regulate, or even limit, foreign investment. Jessica Lawrence will discuss with Professor Markus Krajewski, one of the leading experts in international investment law, the impact of an IC on the EU. With the AI, the EU wants to create new investment opportunities for European companies by opening up the Chinese market and eliminating discriminatory laws and practices that prevent them from competing on an equal footing with Chinese and third-country companies in the Chinese market. This bilateral agreement is expected to give an additional boost to trade relations between the EU and China, particularly in the food and beverage market, which accounts for a significant share of EU products sold on the Chinese market each year. Indeed, in 2019, China was the third largest destination for agri-food products in the EU, with 14.5 billion euros ($17.022 billion). In the same year, China was also the second preferred destination for EU exports, identified by its GI specifications, including wines, agri-food products and spirits.
The current impasse between the EU and China over access to the financial market reminds us that 20 years ago the EU also wanted to negotiate with Beijing a financial services agreement that went beyond what the United States had received. The trial had failed at first. The terms and conditions, including majority participation, of life insurance companies in the EU in China were seen as a key theme in bilateral negotiations between the EU and China on China`s accession to the WTO. Indeed, the products mentioned in this agreement must be identified by their particular characteristics, associated with their geographical origin and traditional know-how. At the end of September, after 32 rounds of negotiations on the Comprehensive Investment Agreement (IAC), the main differences between the EU and China (besides sustainable development) were market access, including access to financial services markets. In this context, the concessions that China has offered to the United States under the U.S.-China Economic and Trade Agreement (the “Phase One Agreement” signed on January 15, 2020) are, in this context, the EU`s mandate for its negotiating objectives. It should be noted that an additional list of 175 geographical indications will be protected by both parties within four years of the agreement`s entry into force. It is clear that in recent years China and the EU have managed to promote closer relations with trade and investment. But it is their different political ideologies, economic considerations and strategic priorities that often slow down the scope of their cooperation. After the situation, the conclusion of the AI could be threatened by the end of 2020, as more difficult negotiations on access to financial markets are expected, not least because the EU is trying to obtain at least the same concessions between China and the United States under the first phase agreement.
Clearly, these concessions were agreed on the basis of reciprocity. This scenario is similar to the eu-China financial sector negotiations that took place before China joined the WTO. The main beneficiaries of foreign investment were the automotive industry, followed by commodities, food and agriculture. As far as foreign investors are concerned, the majority of EU investments have been made by private companies investing in their core activities. On the other hand, most Chinese companies investing in the EU appear to be state-owned enterprises (SOEs). Indeed, more than 40,000 new foreign companies were created in China in 2019, while