News Report

EU and China seal a deal behind Biden’s back

After his election as US president, Joe Biden reiterated his pledge to engage with allies, especially in dealing with an increasingly assertive China. In his inauguration speech, he raised expectations further, promising to ‘repair our alliances’.

Mood music from both sides of the Atlantic seemed to herald a honeymoon in which the European Union and the United States would put peace and cooperation at the centre of their collective action, in contrast to the global free-for-all in closing borders and fighting for medical supplies that accompanied the coronavirus pandemic and the ensuing economic recession.

There were few doubts in Washington and European capitals about the hard road ahead, and the shared common ground was reaffirmed emphatically by both sides.

Relief at America’s imminent return to dialogue and cooperation, however, seemed to be put on hold only weeks after Biden’s election by an unexpected move from the European Union.

To the dismay of many in the incoming US administration, the EU unexpectedly announced a high-level accord with China, the Comprehensive Agreement on Investment. Just days before the deal was announced, Jake Sullivan, Biden’s national security adviser, asked for ‘early consultations with our European partners on our common concerns about China’s economic practices’, but his plea was not heard.

The agreement involves access for European companies to the Chinese market, focusing on the liberalization of investment, the elimination of quantitative restrictions, rules against the forced transfer of technology and new obligations about the behaviour of Chinese state-owned enterprises.

Hurriedly negotiated in the final sprint of Germany’s presidency of the EU, it will face opposition from several quarters in Europe. Member states are dependent on China to differing degrees, with many prioritizing the transatlantic relationship, while there are significant political forces keen to challenge the EU’s paper-thin commitments on human and labour rights when it comes to China.


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