September 19, 2021

Progress has recently been made in the ongoing bilateral negotiations on trade and investment. China and the EU have signed a bilateral agreement to protect 100 European Geographical Indications (“GIs”) in China and 100 Chinese GIs in the EU against usurpation and counterfeiting. Negotiations on the conclusion of the Comprehensive Agreement on Investment (“CAI”) are also expected to be concluded by the end of this year. Finally, the EU-China Agreement on China`s accession to the WTO (19 May 2000) concluded that, although the ceiling of 50 to 50 own funds is maintained, China offers a legal guarantee to avoid regulatory interference in private contracts between life insurance joint venture partners. China immediately granted seven new licenses to European life and non-life insurers. In addition, insurance businesses were opened to foreign companies two years earlier than the WTO`s Sino-US agreement on China`s accession to the WTO, and foreign brokers were allowed to operate in China five years after joining, without any need for a joint venture. This would not be the first time that a Sino-US bilateral agreement has hampered efforts between the EU and China to achieve their trade goals. For example, it took China two years to remove the objections mainly raised by the US (the legitimate right of a third party) to conclude the agreement on cooperation and protection of geographical indications between the EU and China. Nor would it be the first time that the EU and the US have competed for access to china`s financial markets. The products mentioned in that agreement must be regarded as characterised by their unique characteristics, associated with their geographical origin and traditional know-how. Interestingly, according to the China Business Confidence Survey 2020 published by the European Union Chamber of Commerce, 62% of members of European chambers would be more likely to increase their investment in China if greater access to the Chinese market were granted.

As far as the EU is concerned, it must recognise that china`s national treatment upon accession to the WTO is subject to its GATS timetable, including financial services. This is why the EU`s requirements are WTO plus in nature and are based on the principle of reciprocity. In other words, China has not failed in its WTO obligations, other than to protect its financial market through bureaucracy, as it has done for electronic payment services. Beyond the first phase of the agreement, the EU must again be pragmatic in recognising that alternative and competitive concessions inside and outside the financial services sector could be “a potential landing zone” on the basis of national treatment. Finally, China remains the EU`s second largest market, with many opportunities for EU companies. It is clear that in recent years China and the EU have been able to maintain closer trade and investment relations. . . .