EU-China Investment Deal: “It Spits In The Face Of Human Rights”

Authored by Soeren Kern via The Gatestone Institute,

The European Union has negotiated a controversial trade deal with China. The pact has been widely criticized because European leaders, in their apparent rush to reach an agreement, have sacrificed their professed concern for human rights on the altar of financial gain. Indeed, precisely one week after the deal was signed, China launched a massive crackdown on democracy activists in Hong Kong.

The so-called Comprehensive Agreement on Investment (CAI), concluded on December 30, was negotiated in great haste by German Chancellor Angela Merkel, French President Emmanuel Macron, the President of the European Commission, Ursula von der Leyen and European Council President Charles Michel. Other EU countries were excluded from the negotiations. Merkel, under pressure from China, reportedly wanted an agreement at any cost before Germany’s six-month EU presidency ended on December 31.

The deal — the details of which have not yet been made public — ostensibly aims to level the economic and financial playing field by providing European companies with improved access to the Chinese market. Currently, China has far more access to the European market than the other way around.

China, however, made only limited concessions in just three sectors — electric vehicles, telecommunications and private hospitals — and with many caveats that will restrict investment opportunities for European companies.

Moreover, on December 19, just days before the EU-China deal was reached, China approved a new national security review system for foreign investment. The new rules allow China to block foreign investment whenever it is deemed to harm China’s national security.

Meanwhile, the EU-China deal lacks meaningful enforcement mechanisms for issues that the EU claims to care about, such as climate change and human rights, including forced labor.

On December 30, Von der Leyen proudly declared that the agreement will “uphold our interests” and “promote our core values.” On January 6, however, seven days after reaching the EU-China trade deal, Chinese authorities arrested more than 50 people, including American human rights lawyer John Clancey, on suspicion of “subversion” in Hong Kong.

Former Hong Kong Governor Lord Patten said the economic deal, which must still be approved by the European Parliament, makes a “mockery” of the EU’s ambitions to be taken seriously as a global and economic player:

“It spits in the face of human rights and shows a delusional view of the Chinese Communist Party’s trustworthiness on the international stage.

“It is worth remembering, for all European politicians wherever they come from, that the Jewish community around the world has been outspoken about Xinjiang and in particular has drawn attention to the similarities between what is happening in that region today and the Holocaust in the 1940s.

“Are we about to see the end of forced labor in Xinjiang and the development of a trade union movement in China? Forget it.

“It is surely inconceivable that the European Parliament can support the miserable draft deal that the European commission wants to sign with Beijing.

“It is a massive strategic blunder at a time when President Biden will be seeking to put together an international partnership of liberal democracies to deal with the bullying loutish behavior and assault on our international rules by Chinese Communists.

“We should not be seeking to contain China but to constrain the Chinese Communist Party.”

In scathing commentary published by the Financial Times, columnist Gideon Rachman argued that the deal was “naïve” and will increase Europe’s vulnerability to pressure from China:

“Over the past year, China has crushed the freedom of Hong Kong, intensified oppression in Xinjiang, killed Indian troops, threatened Taiwan and sanctioned Australia. By signing a deal with China nonetheless, the EU has signaled that it doesn’t care about all that. As Janka Oertel, director of the Asia program at the European Council on Foreign Relations think-tank, puts it: ‘This is a massive diplomatic win for China.’ ….

“It is naive to believe that China will respect the agreement it has signed. It is naive to ignore the geopolitical implications of doing a deal with China right now. And it is naive to think that the darkening political climate in Beijing will never affect life in Brussels or Berlin….

“Over the past year, China has repeatedly demonstrated its willingness to ignore treaty commitments. Its new national security law violates an agreement with Britain that guaranteed the autonomy of Hong Kong. China has also imposed tariffs on Australian goods in violation of the China-Australia free trade agreement….

“The EU-China deal was pushed hard by Angela Merkel, the German chancellor, and concluded right at the end of her country’s presidency of the EU. Ms Merkel is seen as a champion of liberal values. But her approach to China is largely driven by commerce. She knows that the German car industry has had a rough few years, and China is its largest market….

“Many Europeans also believe that the US is on the brink of a new cold war with China — and want little part of that…. A European desire to avoid military confrontation in the Pacific is also rational. But relying on an American security guarantee in Europe, while undermining American security policy in the Pacific, does not look like a wise or sustainable policy over the long run.

“The Europeans are also kidding themselves if they think they can be blind to the increasingly authoritarian and aggressive nature of Xi Jinping’s China. For the past 70 years, Europeans have benefited from the fact that the world’s most powerful nation is a liberal democracy. If an authoritarian nation, such as China, displaces America as the dominant global power, then democracies all over the world will feel the consequences.

“Even in the current geopolitical order, China has repeatedly demonstrated its willingness to use its economic power as a strategic weapon. By deepening their economic reliance on China — without coordinating their policy with fellow democracies — European nations are increasing their vulnerability to pressure from Beijing. That is a remarkably shortsighted decision to make, for a ‘geopolitical commission.'”

Analysts Amrita Narlikar and Samir Saran argued that the EU-China deal has seriously weakened the EU’s own hand while alienating allies and friends:

“There is much that is wrong with the deal, which we could point to, in both process and implications.

“We could look askance upon the remarkable haste with which the European Union — normally a lumbering, complicated, and bureaucratic machine — has pushed this deal through. Or we could suggest that the Zaubertrank [magic potion] at work now be made the official beverage for the bureaucracy in Brussels.

“We could raise an eyebrow at the fact that the final negotiations took place at what is usually expected to be the quietest time of the year: Holiday closures, understaffed newspaper offices, and tired citizens desperately trying to catch a breath or two in the period that is so sweetly described in German as “zwischen den Jahren” (the quiet time in between the years). Our raised eyebrows could perhaps rise further still if we turned our attention to the fact that people across Europe are caught in a surging second wave of the coronavirus pandemic (on the day that the deal was signed, Germany reached a new and depressing record of daily deaths due to COVID-19). And we could applaud that neither the pandemic nor the holiday despair could prevent this ‘systemic rivalry’ from being recast.

“We could question not only the timing of the EU-China party, but also the choice of protagonists: In what capacity was President Macron present at this meeting? The impression that screenshots of the meeting give is that the two largest economies of Europe — Germany and France — are in the driver’s seat; all the attention that the union claims to give to representation and accountability for its remaining 25 members (to be reduced to 24 with Britain exiting on 31 December) is little more than lip-service.

“We could even — if we were thus inclined — point out politely that we are not convinced by the European Commission President, Ursula von der Leyen’s, claim that the ‘Agreement will uphold our interests and promotes our core values. It provides us a lever to eradicate forced labor.’ The clauses, at least as they are reported in the EU’s Press release, are weak. They are, in fact, so weak, that one might almost want to graffiti LOLOL (Laugh Out Loud On Labour standards) all over it, were it not for the tragic and horrendous human rights violations that are reported in Xinjiang.

“We could raise all these issues, and more along such lines. But they still would not get us to the crux of a matter that is deeply political.

“International trade and investment — for all the conceits that many economists and lawyers seem to have about these issues — are inherently political. And they have become even more political in the context of China’s rise: Not only because of the use and abuse of multilateral rules by non-market economies (which is what defenders of CAI tend to focus on), but also because of the fundamental difference in values that should define the goals of multilateral cooperation. Contra the inclination of technocrats to reduce values to labor and environmental standards, values include first-order principles of democracy, liberalism, pluralism, and more. And international trade and investment, especially in a world where interdependence can be weaponized, have become just too important to be left in disciplinary silos or technocratic bubbles. CAI is not ‘just’ a matter of investment, or even standards; it is a matter that has potentially serious security implications. It begins to dramatically alter who we are as a society, community and people.

“China has, perhaps, more than ever in 2020, given Europe ample evidence of these differences. It has threatened and bullied democratic Australia for having the gumption to push for an enquiry on the origins of the pandemic. Its new security law has all but abolished the promise of “one country two systems” for Hong Kong. Its adventurism in the neighboring seas has increased. Its border conflict with India has escalated to a new level. Its increasing use of ‘wolf-warrior diplomacy’ has even given up the pretense of sweet talk on many issues that most democracies hold dear.

“Despite all these clear provocations, the EU has done little to update its strategy. It has — almost religiously — continued to repeat its mantra of 2019: It sees China as its partner, competitor, and rival. This, in fact, was nothing but fence-setting — and with the conclusion of the CAI negotiation, the EU has signaled to its own people, its allies, and indeed to China, which side of the fence it prefers.

“The CAI — despite von der Leyen’s claim that it will help the EU defend multilateralism —is not multilateral at all. It is a bilateral deal with an authoritarian power that seems to have a very different understanding of multilateralism. It comes at an especially ill-opportune time. It signals to China that the EU now, not only turns a blind eye to, but actually rewards its increasingly aggressive behavior. It suggests that the EU has scarce regard for its closest ally — the United States — which, under the incoming Biden administration, had clearly revealed that it would like to work together on China. It does not reassure other democracies — such as Australia, Japan, and India — and it also undermines the potential for alliances with like-minded players. And the deal is a slap in the face of multilateralism: It shows how, for all its talk in favor of reforming multilateralism, the EU actually attaches greater worth to a bilateral deal with a country that has contributed significantly to the breaking of the system….

“Importantly, these are all choices that the EU has made. They cannot be fobbed off on China. China has simply gamed a round of Realpolitik rather effectively. Europe, in contrast, has weakened its own hand, given short shrift to its own values, and undermined the position of its friends and allies.”

Former Deputy U.S. National Security Advisor Matt Pottinger tweeted that the EU’s actions showed that the root of the problems in transatlantic relations lie with European elites and not with U.S. President Donald J. Trump:

“Leaders in both U.S. political parties and across the U.S. government are perplexed and stunned that the EU is moving towards a new investment treaty right on the eve of a new U.S. administration.

“There is nowhere for bureaucrats in Brussels or Europe to hide. We can no longer kid ourselves that Beijing is on the verge of honoring labor rights, while it continues to build millions of square feet of factories for forced labor in Xinjiang.

“The EU Commission’s haste to partner with Beijing despite its grotesque human rights abuses has removed a fig leaf. Some European officials and commentators liked to claim that the Trump Administration was an impediment to even deeper transatlantic cooperation. Now it is plain to all that this isn’t about President Trump. It’s about key European officials. Look in the mirror.”

The chairman of the European Parliament’s delegation for relations with China, Reinhard Bütikofer, said that European leaders had “folded” on the issue of forced labor: “It is ridiculous to try selling that as a success.” He added that Germany has allowed China to “drive a huge wedge between the US and Europe.” He also tweeted:

“Merkel, Macron, Michel and von der Leyen have so far refused to explain their China deal to the public. So far, so bad. But if they dodge the issue of this Beijing imposed persecution of Hong Kong democrats now, too, they should be considered as leaders in political cowardice.”

China scholar Andres Fulda said that the EU-China deal was a result of “group think” among senior political leaders in Europe and represents “a major win for General Secretary Xi Jinping and really bad news for anyone who strives for more value-led European common foreign and security policy.” He added that the deal can theoretically still be scrapped, but it will require: a) resistance by European civil societies; b) criticism by the European Parliament; and c) interventions by the Biden administration.

European lawmaker Guy Verhofstadt tweeted that “any Chinese signature on human rights is not worth the paper it is written on!”

Writing for the Spectator, the Director of Hong Kong Watch, Johnny Patterson, called on the EU to scrap its deal with China:

“If Europe is serious about being a bastion of liberal values, the European Parliament cannot allow the interests of the German car industry to trump international law. While we have been arguing about Brexit, it has become clear that relationships with China will be the defining diplomatic issue of the century. Beijing’s disregard for international law in Hong Kong is serving as a catalyst for a change in alliances — both Britain and Europe have serious choices to make.”