Nevertheless, the CAI is not error-free. There is no mention of human rights in the agreement. In November and December 2020, just before the EU and China announced that they had agreed on the text, the European Parliament issued two resolutions stressing that “respect for human rights is a prerequisite for establishing trade and investment relations with the EU” and condemning “the government-led system of forced labour”. in particular, the exploitation of Uyghurs and other Muslim minorities. in Xinjiang. In addition, 36 civil society organisations have signed an open letter to the EU. The appeal calls for the inclusion of a binding human rights clause in the CAI. It also urges the EU to make its accession to the Convention conditional on China`s ratification of key human rights instruments, such as the International Covenant on Civil and Political Rights and ILO Conventions. In any case, experts experienced in international trade and investment disputes will find that in practice there are very few objections to this within the framework of existing investment agreements. And in China, almost no foreign law firm has embarked on the path of international arbitration since 1979, as it would destroy all future business prospects in China. To these objections regarding geopolitics and timing, supporters of the agreement counter that after seven years in the last weeks before the deadline set by both sides, a window of opportunity has opened.

It`s impossible not to see the tactical motivation for China`s last-minute concessions, which are part of an initiative to avoid a more coordinated approach by the new Biden administration. And for geoeconomic criticism, supporters of the deal oppose two arguments. Firstly, that an investment agreement alone cannot achieve the grand goal of moving China: in short, the performance can only be modest, which contradicts some of the optimistic statements of the EU itself. And secondly, that the EU has nevertheless managed to incorporate into the agreement more WTO clauses on which more can be built later and which could only be linked now – or never – in the agreement. Another source of criticism is the lack of effective commitments and implementation mechanisms for the sustainable development chapter. On paper, the agreement states that the parties will make “sustained and continuous efforts” to ratify ILO conventions on forced labour. This is a common expression in “new generation” trade and investment agreements, including sustainable development provisions such as the EU-Korea Free Trade Agreement or the EU-Vietnam Free Trade Agreement (FTA). In practice, these indefinite commitments do not impose a profit obligation, making it very difficult for the EU to prove a violation of the agreement as long as China makes a minimum effort to ratify ILO conventions. These gaps in the wording of sustainable development commitments were recently revealed by a judgment of the Expert Group on the EU-Korea Free Trade Agreement.

As for the mechanisms for the implementation and settlement of disputes, they do not apply to the chapter on sustainable development. The agreement provides for the establishment of a separate working group to monitor the implementation of sustainable development commitments and a weak dispute settlement mechanism composed of a group of experts. www.euractiv.com/section/eu-china/opinion/china-investment-agreement-and-the-golden-calf-of-eu-unity/; www.politico.eu/article/germanys-drive-for-eu-china-deal-draws-criticism-from-other-eu-countries/ Europe`s assurance that investment will remain open is clearly a victory at a time when China, which practices economic decoupling under the guise of a “dual circulation” economy, fears further restrictions from its partners. However, if we leave the process aside and look at the content, the positive rating of Ivan Scalfarotto and representatives of the Italian business community may have to be reconsidered or reduced. In reality, it is unlikely that the vast majority of Italian small and medium-sized enterprises will benefit from the CAI. Therefore, CAI could theoretically be an excellent opportunity for Italian and European companies. In reality, however, the number of companies that will benefit from this agreement could be significantly smaller and focus on larger economic actors, which often do not include Italian companies. There are three victories for China. One is to achieve what he often calls “certainty,” an implicit commitment against economic decoupling by limiting the reasons on which restrictions on Chinese direct investment in Europe can be based. Given the CCP`s fear of a front on this issue, this is important. In terms of public diplomacy, the SEPARATION of the EU from the US – even though it follows years of trade threats from the top of the outgoing US administration – is also a victory, at least in the short term. The third victory is that China can build on Europe`s claims that it has advanced its values while evading law enforcement and remedial action on the issues at the heart of current public debates – the environment and labour.

The Italian economy, in particular, expressed a more positive assessment of the CAI. In line with the biggest business voices in Europe, Italian companies hailed China`s unification as an opportunity. In the newspaper Milano Finanza (Milan Finance), Marco Marazzi, partner at Baker and McKenzie, spoke positively about the new opportunities for European and Italian companies regarding the conclusion of the agreement. According to Marazzi, Italy could particularly benefit from the CAI`s openings in the health sector (Marazzi, 2020). Footnote 14 Later, Marazzi, in collaboration with Mario Boselli, President of the Italian Foundation for China, wrote an article about Milano Finanza entitled “The EU-China Investment Agreement is a great opportunity for Italy.” In the article, the authors promise the new government a closer link with the country that alone accounts for 30% of global growth and will become the most important consumer market in 2025: China (Boselli & Marazzi, 2021). Footnote 15 It mentions other sectors where Italian companies are strong and can expand in China, such as automotive, mechanical, fashion, chemicals and food. However, both deplore the low level of investment by Italian companies in China, which amounts to about 10 billion per year, and point to the difference compared to investments from Germany, 80 billion (Boselli & Marazzi, 2021). However, even the positive assessments of the CAI`s conclusion, such as those mentioned above, recognize that not only are Italian companies lagging behind in terms of investment in China compared to other European counterparts, but also that it will be difficult for CAI to change such a situation if the change does not occur beforehand in the following ways: how investments in Italy are considered. Investments are not detached from trading, and according to Marazzi and Boselli, they currently remain the best way to gain market access and stocks in China (Boselli & Marazzi, 2021). Footnote 17 Given all this, the critical issue with respect to the CICA is its limited effectiveness and applicability. First, there is a missing section on investment protection.

Without them, existing bilateral investment treaties between China and some EU member states will be used, meaning a diversified level of protection. Both sides have decided to continue talks for another two years to conclude the investment protection chapter, but there are no significant incentives to close it (e.g. B by making the implementation of the CAI dependent on this issue). Secondly, the dispute settlement system is inconsistent at the intergovernmental level, since the provisions on sustainable development have a separate mechanism and can only lead to recommendations. It therefore does not guarantee the full implementation of the agreement. Third, the high-level consultations launched within the CAI could prove beneficial, but only if there is enough goodwill on the Chinese side. The overall objective of the CAI is to modernise the bilateral investment treaties (BITs) concluded by all Member States with China and replace them with a single legal framework for eu-China investment relations. However, the BITs would remain in force for the time being, at least until the completion of a section on investment protection. The reason for this is the need for predictable economic relations with China. This is crucial as the interdependence of the two economies is considerably profound.

In order to complete the dangerous path of mediation of disputes over investment in services and possibly improve a procedure for the toothless settlement of disputes related to sustainable development issues, EU negotiators seem to have found a political path: working groups that meet twice a year at the level of the Commissioner for Trade and the Minister for Trade, and a high-level dialogue, which involves once a year a Vice-President of the Commission and a Chinese Vice-Premier. currently Valdis Dombrovskis and Liu He. This is what the Commission hails as a political coup. .