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EU paves the way for investment pact with China

EU paves the way for investment pact with China

EU member states gave political backing to Brussels' planned investment pact with China on Monday, paving the way for a deal between the world's largest economic blocs.

At a meeting of ambassadors, the German EU presidency noted that no member had "raised a stop sign and thus cleared the way for political endorsement," a diplomat said.

Diplomats pointed to "recent positive developments" in the negotiations, and China reportedly responded to concerns about the alleged use of forced labor on its farms. 

This came after the Chinese Foreign Ministry said last week that "negotiations have entered the final stretch", and a second EU diplomat said that an agreement could now be formally announced this week.

"We have to be careful, but as long as China agrees, there could be an official announcement from Brussels and Beijing at the end of the week," the chief envoy told AFP.

No member state intervened in the meeting to block the deal, but later Poland's ambassador Andrzej Sados said he had "expressed our doubts" after Germany added it to the agenda.

The deal would be a major boost for both parties and would strengthen economic ties between the giants ahead of US President-elect Joe Biden's arrival at the White House in January.

Outgoing US leader Donald Trump has engaged in a trade war with China, but his successor has also raised concerns about the EU's reach, and his team has urged Brussels to consult with Washington.

"The new administration in the United States will start working in three weeks ... and an agreement with China should take into account the EU's relations with the United States," Sados told the Polish news agency PAP.

"We also said that we should not act too hastily after seven years of tough negotiations. Meanwhile, such an issue is suddenly added to the agenda of the EU ambassadors meeting in Brussels. This is unheard of."

"In the last days of the German presidency we are facing a sudden and unjustified acceleration on a very important issue, which concerns international relations."

Germany, the bloc's main economic power, which holds the rotating presidency of the EU until the end of the year, has made securing the deal a priority of its time at the helm.

The European Commission, the EU executive, had said before Christmas that the draft "political agreement" was "95 percent ready" and only needed the green light from capitals.

China's commitment to labor rights remained an obstacle, but Europe has long sought greater access to the huge Chinese market for its companies.

- 'Systemic rival' -

The head of the EU chamber of commerce in Beijing, Joerg Wuttke, told AFP this month that negotiators "had apparently made great strides in market access."

As part of the deal, the EU has also been pressuring Beijing to strengthen respect for intellectual property, end obligations to transfer technology, reduce subsidies for public companies and improve climate commitments.

While the Trump administration has engaged in a war of words with Beijing, Brussels has taken a balanced approach.

EU states treat China as a "systemic rival" and have expressed concern about China's rights record, especially its crackdown in Hong Kong and the treatment of Uighurs.

Berlin wanted the deal to be signed at a joint EU-China summit in September, but the coronavirus fueled the online event and no deal was signed.

China overtook the United States in the third quarter of this year to become the EU's top trading partner, as the Covid-19 pandemic disrupted the US economy while Chinese activity rebounded.

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