Outlook for the EU-China Comprehensive Agreement on Investment Unclear, as EU Parliament Votes to Suspend Ratification Efforts

On May 20, 2021, the European Parliament voted to suspend ratification efforts of the “in principle” Comprehensive Agreement on Investment (CAI) with China.

The deal must be approved by the European Parliament and the EU Council, which consists of all 27 heads of state, before it can become law.

Announced in December 2020 after seven years of negotiations, the EC paused the deal’s ratification following Beijing’s sanctions of five European officials. These sanctions were themselves a reaction to sanctions of Chinese officials by several Western countries in response to the Chinese government’s treatment of the Uighurs in Xinjiang.

According to EuroNews, earlier in the month, the EC released the following official statement: “In this context, Chinese retaliatory sanctions targeting Members of the European Parliament and an entire parliamentary committee are unacceptable and regrettable. The prospects for the [investment deal’s] ratification will depend on how the situation evolves.”

The German chancellor, Angela Merkel, said that the CAI is an “important undertaking” despite “all the difficulties that will certainly arise in the ratification process.” During her participation in a digital conference of the Union Party parliament group, Merkel also noted that “we will neither be able to cope with climate change nor solve WTO issues or other global issues without or against China.”