Former Trade Negotiators Wonder if New EU-China Investment Agreement Will Hurt US-EU Efforts
Wendy Cutler, the lead negotiator for the Trans Pacific Partnership, and James Green, who was the Office of the U.S. Trade Representative's senior official in China, are questioning whether a new European Union-China investment agreement will undercut the united front President-elect Joe Biden wants on Chinese economic abuses.
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Cutler, now vice president at the Asia Society Policy Institute, and Green, a senior adviser at McLarty Associates, in a Dec. 30 blog post wrote that "clearly, one of Beijing’s key objectives in making last-minute concessions to Europe is to drive a wedge between the U.S. and EU approaches towards China on the eve of a new Administration in Washington."
The Comprehensive Agreement on Investment, the authors say, could have lower ambition than the U.S. on issues of forced technology transfer, subsidies and state-owned enterprises. They ask: Will the EU "still be an advocate of the trilateral process and dealing with non-market-economy matters through WTO negotiations or smaller coalitions, or will Brussels consider that their concerns have been largely addressed in the CAI?"
They say that Beijing will use celebratory meetings on the agreement to counter arguments the Chinese economic system is unfair "and mute critics of recent Chinese strong-arm trade tactics towards Australia." European officials who will have to sell the European Parliament on ratifying the CAI will also argue the agreement obtained real structural reform and market access, Cutler and Green said. That, too, would undercut the ability of the world's two richest regions to have a united front on Chinese industrial policy, they say.
Jorge Guajardo, a McLarty Associates senior director and former Mexican ambassador to China, noted the piece on Twitter: "I was always quick to criticize [President Donald] Trump for pushing back on China without forming an alliance, but in the back of my mind, I always suspected the Europeans of being unreliable when it came to China. They have proven Trump right on this."