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Sense Hofstede's avatar

Adding some context to the EU-China CAI news for the Americans:

1. Americans really underestimate the extent to which Europeans feel they need to catch up with the US on investment. Concessions resulting from the Phase 1 trade deal and elsewhere mean that US companies have been getting the kind of access that Europe also wants for its companies. Moreover, the way the Entity List bans work in practice mean that American companies get licences while European companies are not exempted from bans. Trump's sanctions appear to some to help reserve the lucrative Chinese market for US companies.

2. Outgoing Trump people and incoming Biden officials upset that Europe did not ask for permission first need to watch their tone a little bit. DC did not ask for permission to conclude its deals with China. I did not see the same moral outrage about concluding a deal with this regime when America did it. I do not say coordination between Brussels and Washington is not smart, nor do I dismiss the political arguments against this deal. But such arguments are best made keeping European sensitivities in mind as well as American.

3. The deal appears to be pushed mainly by Merkel and Germany in general. Merkel will leave office this year. Her dominance and the presence of France's Macron during the summit have raised some eyebrows in certain European capitals.

4. However, it falls within the EU's own competences. That means its ratification after political approval of the final text (which is still a while off) will have to be done by the European Parliament and the Council of the EU (meeting place of relevant ministers in a kind of senatorial role). There is strong resistance in the EP to this deal. Even if it ultimately votes in favour, the public process is going to be hurtful to China's feelings.

5. Europe needs to be more mindful that China has a history of ignoring its past promises. Moreover, even if it follows through and e.g. ratifies the mentioned ILO conventions, it still depends on interpretation. Beijing denies there is forced labour in Xinjiang, so it would just say the conventions do not apply. After all, the PRC has ratified UNCLOS too, but simply denies it is in violation.

6. However, committing to this agreement now gives Europe a lot of credit in China. This can be helpful in future endeavours. Moreover, once Beijing has committed itself to these promises, the text becomes a stick to beat it with once it breaks them. Germany likes to do things by the book and base itself on what others have committed themselves to. The CAI might also serve to provide justification for stronger countermeasures and defensive regulations in the future in response to breaches.

7. Not everything is about the US. It is counterproductive to see this preliminary deal solely in terms of American/Biden wins/losses.

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Arran's avatar

A question re Ambassador Liu Xiaoming's retirement: was this planned/done for standard age-related reasons, or because of his twitter incident, abysmal interview performances and litany of similar gaffes in 2020? Assuming the former, but you never know...

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