The European Commission will seek ask support of the Member States to open negotiations with China that could lead to a broader trade deal if the two partners can overcome anti-dumping disputes.
EU trade chief Karel De Gucht said he would ask the European Union’s 27 countries to agree a negotiating mandate for a deal with China that would reduce barriers to each other’s markets and encourage new capital flows.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
This is the first ever proposal for a stand-alone investment agreement since foreign direct investment became the exclusive competence of the EU under the Lisbon Treaty.
The Commission said that an accord would bring together current separate agreements into one text, with the aim of improving ‘the protection of EU investments in China as well as Chinese investments in Europe, improving legal certainty regarding treatment of EU investors in China, reducing barriers to investing in China and, as a result, increasing bilateral investment flows.’
The agreement would secure access to investment markets for both sides and improve the treatment of investors and their assets – including key technologies and intellectual property rights.
The Commission said there was "huge potential" to boost investment ties which are relatively modest considering the size of the overall trade relationship, with China counting the EU as its largest export market.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIn 2011, European companies invested EUR17.5 billion in China, with flows the other way just EUR2.8 billion. Only 1.4% of total foreign direct investment into the EU comes from China.
If the mandate is adopted, the Commission hopes to begin talks soon, pending the completion of China’s own domestic approval procedures.
"An EU-China investment agreement will help deepen our ties and sends the signal that we are firmly committed to building a strong partnership. The agreement needs to secure existing openness and deliver new liberalisation of the conditions for accessing each other’s investment market," Karel De Gucht added.
