Europe And China Approve Landmark Investment Treaty, Snubbing U.S. The European Union concluded the deal with China after seven years of negotiations. Last week, the incoming administration of President-elect Joe Biden had urged the EU to wait.
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Europe And China Approve Landmark Investment Treaty, Snubbing U.S.

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Europe And China Approve Landmark Investment Treaty, Snubbing U.S.

Europe And China Approve Landmark Investment Treaty, Snubbing U.S.

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AILSA CHANG, HOST:

After years of negotiations, the European Union and China reached an agreement today on a treaty that aims to make it easier for European companies to do business with the world's second-biggest economy. The deal was made despite a request by the incoming Biden administration for the EU to hold off. NPR's Rob Schmitz joins us from Berlin to talk about all of this.

Hey, Rob.

ROB SCHMITZ, BYLINE: Hey, Ailsa.

CHANG: Hey. So, I mean, we should point out that this deal has been - what? - seven years in the making. But...

SCHMITZ: Yeah.

CHANG: ...The Chinese side has been working hard to finish it before the end of this year. Why was Beijing so eager to finalize things this year?

SCHMITZ: Yeah, it's interesting. China had been dragging its feet on this investment treaty with the EU for years. And just a year ago, Chinese Foreign Minister Wang Yi told Brussels that China could not possibly sign the agreement that the EU wanted. So it went from that to this sudden push by Beijing to make enough concessions to please the European side so that they would sign it. And a big reason for this last-minute push on China's part was Joe Biden winning the U.S. presidency.

CHANG: Wait. Help me out with that. Why did a Biden win push Beijing to sign this treaty with the EU?

SCHMITZ: Yeah. As we've reported, Biden has made strong signals that he wants to, A, revive the trans-Atlantic relationship between the U.S. and Europe that's been heavily damaged under a Trump presidency. And B, he wants Europe's help in keeping China's rising economic, political and military power in check. So that was all the signals that Beijing needed to try and close this deal with the EU before Biden was sworn in. And even though the Biden transition team publicly asked the EU to wait until the new president took office before they signed anything, the EU went ahead anyway.

I spoke to Theresa Fallon of the Centre for Russia Europe Asia Studies about this. Here's what she said.

THERESA FALLON: Well, after the four years of the Trump administration, which characterized the EU as worse than China, there is a growing anti-American sentiment. And there's also the strategic autonomy debate in Europe, meaning we don't want to do what the U.S. says. We want to do it, as Frank Sinatra has said, my way.

CHANG: (Laughter).

SCHMITZ: Yeah. And Ailsa, EU diplomats call this new approach with the U.S. the Sinatra doctrine.

CHANG: (Laughter) Oh, nice.

SCHMITZ: And German Chancellor Angela Merkel took the lead in pushing Europe to move ahead with this agreement. This is her last year as chancellor. And we are in the final days of Germany holding the rotating EU presidency. So this treaty with the world's second-largest economy was a priority for her. But there's a lot of concern throughout the EU about China's human rights record and about reports of forced labor in China's northwest region of Xinjiang. And debates over this in the European Parliament could delay ratification of the treaty beyond 2022.

CHANG: Oh. OK, well, if that's hanging, what will all of this mean for President-elect Biden's plans to get European help to manage China?

SCHMITZ: Well, it's not going to make it easier. This investment treaty promises a more equal playing field for EU companies in China. It brings European countries closer to China from an economic standpoint. The thing is, in the past, Beijing has used these cozier business and trade relationships to exert political leverage. And that's what the incoming Biden administration is nervous about. And it means it may be more of an uphill battle for the Biden administration to get Europe's help with China.

CHANG: That is NPR's Rob Schmitz joining us from Berlin.

Thank you so much, Rob.

SCHMITZ: Thank you.

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