European Parliament decides to freeze investment agreement with China

The European Parliament has voted to freeze the ratification of the EU-China investment deal due to the sanctions that Beijing has imposed on five members of the hemicycle, Euronews reported.

In a resolution passed on Thursday afternoon, the Parliament also deplores what it calls the “crimes against humanity” that are taking place against the Uyghur Muslim minority in the Xinjiang region and the crackdown on the democratic opposition in Hong Kong.

The latest development represents a new blow to the EU-China Comprehensive Agreement on Investment (CAI) that European leaders reached during a video call with Chinese President Xi Jinping less than five months ago.

The agreement’s main goal is to increase market access and ensure fair treatment for EU investors and companies doing business in China. The text wants to create a so-called level playing field and contains provisions on state-owned enterprises and subsidies.

The ratification of the investment deal by the European Parliament—a necessary step in the EU legislative cycle—was in doubt from the very moment the draft text was published, but tensions escalated rapidly when, in late March, the European Union decide to impose the first sanctions against China in more than 30 years.

The raft of measures, designed in coordination with Western allies, targeted four Chinese officials and one entity believed to be involved in the human rights violations against the Uyghur minority.

China reacted swiftly and furiously: in an almost instantaneous counter-strike, the Chinese Foreign Ministry slapped sanctions on ten European individuals, including five Members of the European Parliament, and four entities, among which was the Parliament’s subcommittee on human rights.

Beijing also blacklisted elected officials from the UK, the US, and Canada. In total, more than 30 individuals and entities were sanctioned.

The Chinese counter-sanctions have infuriated the European Parliament and soured the mood for ratification.

In the joint resolution approved on Thursday with 599 votes in favor and 30 against, MEPs lambaste Beijing’s response, calling it “an attack against the European Union and its Parliament as a whole, the heart of European democracy and values, as well as an attack against freedom of research.”

“While the EU’s sanctions target human rights violations and are based on legitimate and proportionate measures embedded in international law, China’s sanctions lack any legal justification, are entirely unsubstantiated and arbitrary and target the criticism of such human rights violations,” the parliamentarians wrote.

The MEPs say that any discussion around the investment deal “has justifiably been frozen because of the Chinese sanctions” and refuse to open the debate as long as they remain in place. They argue their ability to scrutinize the agreement has been “significantly hindered” by the restrictions placed on the subcommittee on human rights.

Moreover, the Parliament “considers the sanctions to be part of an effort to police speech about China worldwide and to determine what kind of speech and discussions would be allowed globally, and sees this effort as part of a totalitarian threat.”

The lawmakers took the opportunity to push the European Commission, which acts as main negotiator of the deal, to “improve the protection of human rights and support for civil society in China” and underlined that other trade and investment agreements with regional partners, like Taiwan, “should not be held hostage to the suspension of the CAI ratification.”

MEPs also urged the Chinese government to ratify and implement several conventions of the International Labour Organization (ILO), including those related to forced labor, freedom of association and the right to organize.

China and the United States are the only big economies that have not ratified the 1930 convention that abolishes forced labor in all its forms. China hasn’t ratified either the United Nations’ International Covenant on Civil and Political Rights.

Reacting to the move from Brussels, the Chinese Foreign Ministry said the investment deal is a “win-win” for both sides and asked for “positive efforts” towards an early ratification. Spokesperson Zhao Lijian defended the Chinese counter-sanctions as a “necessary, legitimate and just reaction to the EU’s moves of imposing sanctions and seeking confrontation.”

“China has every sincerity in developing its relations with the EU. That said, we will firmly safeguard its sovereignty, security and development interests. Sanctions and confrontation cannot solve the problems; dialogue and cooperation is the right way forward,” he said.