EU and China to sign investment deal amid unease over rights

In this photo taken April 11, 2020 and released by Melanie Wang, Zhang Zhan stand near scaffoldings outside a shop during a visit to Wuhan in central China's Hubei province. (Melanie Wang via AP)

BRUSSELS (AP) — The European Union and China are set to sign a long-awaited business investment deal after seven years of intense discussions despite concerns about the human rights situation in the country.

The provisional agreement is set to be announced Wednesday, an EU official with direct knowledge of the talks said. The official was not authorized to speak publicly as a matter of practice.

The deal was sealed after China committed to pursuing ratification of the International Labor Organization’s rules on forced labor, according to the unnamed official. The EU hopes the agreement, known as CAI, will help correct an imbalance in market access and create new investment opportunities for European companies in China by ensuring they can compete on an equal footing when operating in the country.

The EU previously said the agreement, which includes provisions for settling disputes, should increase the transparency of Chinese state subsidies and make sustainable development a key element of the relationship between the EU and China. The deal also includes clear rules against the forced transfer of technologies, a practice in which a government requires foreign investors to share their technology in exchange for market access.

The agreement was reached as the EU expressed concerns Tuesday about “the restrictions on freedom of expression, on access to information, and intimidation and surveillance of journalists, as well as detentions, trials and sentencing of human rights defenders, lawyers, and intellectuals in China.”

The EU’s diplomatic agency, the European External Action Service, called for the immediate release of Zhang Zhan, a former lawyer who reported on the early stage of the coronavirus outbreak in China and has been sentenced to four years in prison.

“According to credible sources, Ms. Zhang has been subject to torture and ill-treatment during her detention, and her health condition has seriously deteriorated,” the EU said. “It is crucial that she receives adequate medical assistance.”

To enter into force, the agreement will need to be ratified by the European Parliament, and the issue of human rights could be a sticking point.

“The stories coming out of Xinjiang are pure horror. The story in Brussels is we’re ready to sign an investment treaty with China,” Guy Verhofstadt, a Belgian member of the EU legislature said as he tweeted out a news story on forced labor in the Xinjiang region of northwestern China. “Under these circumstances any Chinese signature on human rights is not worth the paper it is written on.”

The EU-China agreement also has the potential to cause tension with the administration of U.S. President-elect Joe Biden only weeks after the EU proposed a trans-Atlantic dialogue to address “the strategic challenge presented by China’s growing international assertiveness.”

The EU official said the investment deal will give the EU the same level of market access in China that the United States has and insisted that the deal will benefit other trading partners by getting China to commit to high standards of conduct.