State of Play and Way Forward

EU-China Comprehensive Agreement on Investment: State of Play and Way Forward Overview 1. EU Common Commercial Policy 2. China's Foreign Investment Law 3. EU-China Strategic Partnership and the BRI EU Common Commercial Policy - European market at the heart of the European integration process - 'Market power Europe': '[T]the EU's identity, both historically and presently, is crucially linked to its experience with market integration' (Damro, 2007) - The EU Single Market is one of the world's largest economies with a GDP of 15 trillion euro. - It accounts for over 500 million consumers, and 21 million SMEs. - Economic benefits of the Single Market amount to 8.5% of EU GDP. Art. 3 TFEU 1. The Union shall have exclusive competence in the following areas: a. Customs union; b. The establishing of the competition rules necessary for the functioning of the internal market; c. Monetary policy for the member states whose currency is the euro; d. The conservation of marine biological resources under the common fisheries policy; e. Common commercial policy. 2. The Union shall also have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope. Art. 207 TFEU 1. “The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalization, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union's external action. (...)” China's Foreign Investment Law • Centrality of inward foreign direct investment in the process of opening up and reforms • Outward foreign direct investment and the Go Global Strategy (1999) • Quid of the impact of investments by SOES on the national security of host nations? (importance of IIAs) • Centrality of Free Trade Zones (FTZs) • The G20 as an 'international investment framework' (Sauvant 2019) • Foreign Investment Law of the People's Republic of China (FIL in effect as of 2020): Consolidation of China's foreign investment regime • Domestic reform strategy: 1. End of the structural divide between foreign invested enterprises and Chinese companies (Art. 31 FIL) • Provisions on foreign investments and the protection of foreign investors: 1. Guarantees of investment protection and promotion (i.e. government procurement - Art. 16 FIL) 2. Foreign investment negative list (2015 Opinions of the State Council on Implementing the Market Access Negative List System) EU-China Strategic Partnership and the BRI - Europe is on the map !!! - Estimation of growing trade/investments between the EU and China - Connectivity on both the agenda of the EU and China: Need to identify synergies between the Trans-European Transport Network and BRI (EU- China Summit 2015); Joint Communication on 'Connecting Europe and Asia - Building Blocks for an EU Strategy' (2019) - Concrete developments: • People-to-People exchanges; • Establishment of a connectivity platform; • Some significant investments: Port of Piraeus, Belgrade-Budapest Railway Connection - Strong disagreements on the BRI: • Geo-economics of the BRI • High politicization of Chinese investments in Europe • Regulatory gaps and potential impact on labour rights • Challenges and limitations of the 17+1 Framework 'China realizes that the EU cannot take action as a whole, so Beijing has focused on bilateral relations with individual countries. China also benefits from the competition between EU countries, which is not optimal for EU interests' (Shi 2012)