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EU lawmakers back freezing China investment deal

May 20, 2021

The European Parliament has said it will not approve a multi-billion-euro investment deal with China until Beijing lifts tit-for-tat sanctions.

A Chinese 100 Yuan note on a pile of 100-euro bills
The investment pact aims to open Chinese markets to EU businesses Image: Colourbox/E. Wodicka

The European Parliament on Thursday overwhelmingly adopted a resolution condemning "baseless and arbitrary sanctions" imposed by China on European lawmakers and institutions, adding it would not ratify an investment pact if the sanctions remained in place.

In March, the EU sanctioned four Chinese officials over alleged human rights violations involving the Uyghur Muslim minority group in the Xinjiang region.

China responded with its own sanctions against European politicians, scholars and research groups.

Thursday's resolution said that China's sanctions were an "attack on fundamental freedoms," and urged Chinese authorities to "lift these wholly unjustified restrictive measures.''

What is the EU-China investment pact?

The multi-billion investment accord, called the "Comprehensive Agreement on Investment," needs MEP approval to take effect.

Xinjiang - sanctions on China

The EU and China approved the pact in December 2020, after seven years of negotiations. Proponents of the pact say it would help open China's economy to European companies, and help balance market access.

The deal was pushed through with the heavy backing of Germany, which was the largest EU exporter of goods to China in 2020.

On the sidelines of an EU trade ministers' meeting on Thursday, German Economy Minister Peter Altmaier expressed his support for keeping the pact alive.

China "is the European Union's largest trading partner and the United States' largest trading partner, and thus plays an important role in the global economy," CDU politician Altmaier said. "We want to reach results with China that are in the interest of both sides."

Pact is 'on ice' — for now

However, the ongoing diplomatic spat between the EU and China over human rights issues has complicated moving forward on business ties.

"The European Parliament's decision underlines what I have been saying for weeks: the investment agreement with China is on ice and will only be unfrozen when China withdraws sanctions against members of the European Parliament," said German MEP Bernd Lange, an SPD politician and head of the parliamentary trade committee.

EU seeks level playing fields in China

The status of the deal had already been thrown into question several weeks ago, when European Commission Vice President Valdis Dombrovskis told journalists that the European Commission had "in a sense suspended" political outreach efforts to win approval for the deal.

A spokesperson for the European Commission told DW at the time that the ratification process had not begun, and was subject to a legal review.

The spokesperson said the ratification process was now effectively paused as it "cannot be separated from the evolving dynamics of the wider EU-China relationship."

wmr/msh (AFP, AP)