China EU trade deal collapsed?
It was Merkel’s last deal as EU Council president: Shortly before the deadline in December 2020, Chancellor Merkel concluded the investment agreement with China. Now it has fallen through – because of the sanctions that Brussels and Beijing are imposing on each other.
For Merkel, this is a serious setback. Just recently, she had courted trust in bilateral talks with the Chinese leadership. No one is as economically dependent on China as Germany.
Faced with mutual sanctions, the environment*“is not favorable for ratification of the agreement at the moment,”*said Commission Vice President Valdis Dombrovskis as he announced the halt. You can’t ignore*“the larger context,”*he said.
That’s cute – because the EU created that context itself. It kicked the dispute with China off the fence with its new human rights sanctions, imposed a few weeks after the investment agreement.
There was no compelling reason for this. After all, the violations of Uighur rights that the EU wants to punish have been known for years. No one forced Brussels to pick a fight now, of all times.
Or maybe it is? What is clear is that the new Biden administration in the US is trying to position the EU against China. It i
s also clear that this is supported by the Greens in the European Parliament.
When the Chinese leadership then issued its counter-sanctions, targeting (Green) MEPs as well, it was clear that the agreement was clinically dead. The EU Parliament would no longer ratify it.
The EU (and Germany) thus lost the chance to better secure its investments in the Middle Kingdom. After all, that was what it was all about – and not free trade, as has been erroneously reported time and again.