MNI EXCLUSIVE: EU, China Target Investment Deal In 2020-Draft

By David Thomas

     BRUSSELS (MNI) - The EU and China will commit to a comprehensive investment

agreement in 2020 as well as to work to reform of WTO rules on industrial

tariffs, according to a draft summit statement seen by MNI, which also calls for

an end to forced technology transfers.

     The EU and China "commit to achieve in the course of 2019 the decisive

progress required ...for the conclusion of an ambitious EU-China Comprehensive

Investment Agreement in 2020," the draft due to be released this afternoon said.

     "The high level of ambition will be reflected in substantially improved

market access, the elimination of discriminatory requirements and practices

affecting foreign investors."

     On improved market access, the EU and China will pledge to "intensify work

towards finding mutually agreeable solutions to a number of key barriers as

identified by both parties, with a stocktaking taking place at the next EU-China

summit."

     The two sides reached agreement to "intensify" talks on reinforced WTO

rules on industrial tariffs following Chinese efforts to broaden the scope of

the talks, which the EU had feared would make the talks vaguer and commitments

less enforceable.

     The two sides "agreed to continue working to resolve the crisis in the WTO

Appellate Body and build convergence on other areas of WTO reform."

     China and the EU also state that: "Both sides agree that there should not

be forced transfer of technology."

     The statement came despite initial fears of lack of progress in the talks.

But unity between EU member states and a statement from EU President Donald Tusk

indicating the European side would not sign off on a statement without Chinese

commitments on sensitive issues like forced technology transfer - a subject

Beijing has until now avoided -- and industrial tariffs helped shift the ground,

EU officials said.

     "The Chinese position evolved quite a lot over the weekend," one official

said.

     "At the end we have achieved substantial progress compared with last year's

summit statement," the official said. "It shows what Europe can achieve when it

speaks with one voice."

     European officials' sense of urgency was heightened by fears a deal between

the U.S. and China might leave the EU at a disadvantage, and that the bloc could

not rely on multilateral mechanisms to obtain the same benefits as Washington.

     "The shadow of the U.S.-China negotiation certainly sharpened our position

versus China," the official said.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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