The European Round Table for Industry (ERT) has called for continued engagement with China in a recent publication entitled “Making Open Strategic Autonomy Work – European Trade in a Geopolitical World”. The press release issued on the occasion of the publication of the report states that: “As China has gone from an emerging economy to a primary market and assertive partner, ERT provides insights into some of the issues facing non-Chinese companies operating there. It advocates for improving market access and a level playing field.” Jacob Wallenberg, Chair of Investor AB and Chair of the ERT Committee on Trade & Market Access commented: “China has gone through tremendous economic and social development and demonstrated an unparalleled ability to deploy new technologies. While vital for both European and Chinese industries, jobs, and growth; our relationship with China remains complex. The continuing emergence of China is the most important strategic challenge of our time.”
He added: “The EU needs to invest in developing this relationship with the ultimate aim of China engaging further in a rules based world order. Trade and business on a level playing field rely on the fundamental principles of openness and transparency, and respect for civil liberties and rights.”
On the Comprehensive Agreement on Investment (CAI) the ERT writes in its report: “the CAI will provide fresh opportunities for the EU-China relationship if and when it is ratified and implemented. The Commission has temporarily put on hold efforts to ratify the agreement because of tensions in the EU-China relationship and criticism of some of its elements and concerns about enforceability, including in the European Parliament. The EU should address these concerns and pursue the ratification as soon as the political conditions allow. European businesses will support the Commission as it makes the case.”
The report continues: “The CAI is economically important, but also controversial, and so even when the ratification process resumes, it may prove to be long and challenging. The agreement has been reached at a time when there is renewed attention to human rights in China. There are also concerns about the labor and environmental commitments in the agreement and whether these are sufficiently strong and enforceable. The more detailed and time-specific the Chinese authorities are on the implementation of these aspects of the agreement, including the ILO Fundamental Conventions, the more it will help to create trust and to build support in the European Parliament for ratification once the time is right to pursue this.”
The ERT report concludes that: “The CAI is significant because it offers more on market access than any investment agreement negotiated previously by China with other nations. It shows the benefits of engagement by the EU with China on longstanding challenges for the relationship. It does not mean that those issues are now fully resolved, but it is an important step towards establishing a commercial relationship that is more balanced, fairer, and beneficial for both sides. The agreement binds in, or in some sectors extends, China’s openness to European firms, while also providing a basis for further strengthening the trade and investment relationship.”
The ERT moreover notes that “the EU and China should strengthen their economic and trade dialogue and use it to develop a positive agenda for cooperation, especially on climate change.”
The ERT publication “Making Open Strategic Autonomy Work – European Trade in a Geopolitical World” has been produced with the support of the international consultancy, Global Counsel and is available to download here.
The European Round Table for Industry (ERT) is a forum that brings together around 60 Chief Executives and Chairs of leading multinational companies of European parentage, covering a wide range of industrial and technological sectors. ERT strives for a strong, open and competitive Europe, with the EU and its single market as a driver for inclusive growth and sustainable prosperity. Companies of ERT Members have combined revenues exceeding €2 trillion, providing direct jobs to around five million people worldwide – of which half are in Europe –and sustaining millions of indirect jobs. They invest more than €60 billion annually in R&D, largely in Europe.
