Just weeks before taking office, the incoming U.S. administration of President-elect Joe Biden has received an unwelcome housewarming gift from the European Union in the form of a wide-ranging investment treaty agreed to in principle between the EU and China.
The agreement, concluded this week after seven years of talks, is a significant coup for Germany, which saw its six-month term as EU president expire on Thursday and which sees China as a major market for its auto and other industries.
And it may be an even bigger win for Beijing, which is facing harsh global criticism over its human rights record and is seeking new foreign investment as many companies move operations out of the country in response to the U.S.-China trade war and other concerns.
But the deal was met with dismay by aides to U.S. President Donald Trump, whose administration has engaged in a long-running trade war with Beijing. And while Biden advisers have been less vocal about their approach to China, they had signaled reservations about the pact and a desire for more input before it was concluded.
EU officials say the agreement, known as the EU-China Comprehensive Agreement on Investment (CAI), will allow European companies to compete more equally with state-owned companies in China, which is now the bloc’s second-largest trading partner after the United States.