Trade
was transformed during the early 15th century, during which time the
spice trade became an influential activity, boosting commercial and
cultural exchanges between Europe and Asia. The routes that were opened
drove the world economy from the end of the middle ages to the beginning
of modern times. Interestingly enough, the ancient silk road has now
been rethought and turned into draft route that will connect eastern
Asia with central Europe by land and sea; a sort of Vasco da Gama of the
21st century coming back to Europe and fuelling trade between both
sides.
This initiative, brought about under China's new president Xi Jinping, is the last in a series of measures the world's second biggest economy has launched as a response to the signs of fatigue that its economy showed since the beginning of 2013. A member of the WTO since 2000, the Asian giant is reformulating its strategy, searching for new solutions and taking note of the need for sustainable development. Projects such as the recent package of measures to curb the country's air pollution, or the creation of Shanghai's free trade zone in September 2013, are just an example of this reformist vocation.
On the other hand, the European Union is seeking to broaden its net of trade agreements and deepen its influence as the world's biggest trading power. EU-China trade has increased dramatically in the last 10 years and currently amounts to over €1bn a day. But, despite China becoming one of the EU's biggest sources of imports, Chinese investments in the union only amount to six per cent of China's global investment figures, while China accounts for a poor 2.1 per cent of the EU's foreign direct investment (FDI). In this context, investors are keen to access the Asian market, although a higher protection is demanded.
As trade policy has fallen within EU competencies since 2009, a single, standalone bilateral investment treaty (BIT) between the EU and China that replaces the existing 26 EU members' agreements is crucial. Taking into account the opportunities and interest that this agreement raises, the negotiations are focusing in granting market access for foreign investors without unsettling the balance between investors' protection and the ability of host states to regulate FDI in the public interest. In this case, the BIT represents an opportunity to recalibrate the level playing field within the existing set of investment rules. In this vein, Karel De Gucht, the EU commissioner in charge of negotiating international investment agreements, has recently stressed in public the importance of transparency for future agreements and declared that the EU, "will eliminate any conflicts of interest" and "protect job-creating investment from discrimination and unfair treatment".
At this time of mutual understanding and increasing trade flow, the EU's goals align with China's pursuit of new commercial paths and search for foreign investment. This way, the EU-China BIT reveals itself as a key that can open the door to further cooperation with Asia and move us towards a more dynamic and safer trade relationship.
This initiative, brought about under China's new president Xi Jinping, is the last in a series of measures the world's second biggest economy has launched as a response to the signs of fatigue that its economy showed since the beginning of 2013. A member of the WTO since 2000, the Asian giant is reformulating its strategy, searching for new solutions and taking note of the need for sustainable development. Projects such as the recent package of measures to curb the country's air pollution, or the creation of Shanghai's free trade zone in September 2013, are just an example of this reformist vocation.
On the other hand, the European Union is seeking to broaden its net of trade agreements and deepen its influence as the world's biggest trading power. EU-China trade has increased dramatically in the last 10 years and currently amounts to over €1bn a day. But, despite China becoming one of the EU's biggest sources of imports, Chinese investments in the union only amount to six per cent of China's global investment figures, while China accounts for a poor 2.1 per cent of the EU's foreign direct investment (FDI). In this context, investors are keen to access the Asian market, although a higher protection is demanded.
Furthermore, relations between both parties are at their peak, after the recent outcome of the solar panel-wine dispute. This situation demonstrates the undeniable potential lying latent at the core of the EU and China's economic relations. An investment agreement would foster not only employment, but also wider and more consistent protection for the growing number of investors, while testing both partners' approach towards negotiating further agreements.
As trade policy has fallen within EU competencies since 2009, a single, standalone bilateral investment treaty (BIT) between the EU and China that replaces the existing 26 EU members' agreements is crucial. Taking into account the opportunities and interest that this agreement raises, the negotiations are focusing in granting market access for foreign investors without unsettling the balance between investors' protection and the ability of host states to regulate FDI in the public interest. In this case, the BIT represents an opportunity to recalibrate the level playing field within the existing set of investment rules. In this vein, Karel De Gucht, the EU commissioner in charge of negotiating international investment agreements, has recently stressed in public the importance of transparency for future agreements and declared that the EU, "will eliminate any conflicts of interest" and "protect job-creating investment from discrimination and unfair treatment".
At this time of mutual understanding and increasing trade flow, the EU's goals align with China's pursuit of new commercial paths and search for foreign investment. This way, the EU-China BIT reveals itself as a key that can open the door to further cooperation with Asia and move us towards a more dynamic and safer trade relationship.
