Coronavirus ‘dents plans’ for EU-China investment deal by September

BEIJING, Feb 21, 2020, SCMP. The coronavirus epidemic has reduced prospects for China and the European Union reaching a landmark investment deal in time for a September summit, the EU’s top trade official said on Wednesday, South China Morning Post reported.

Phil Hogan, the EU’s trade commissioner, also said that a planned meeting between the EU’s new leadership and Chinese Premier Li Keqiang would probably not happen in Beijing in March.

Beijing had hoped that a deal could be reached with Brussels in time for President Xi Jinping to present it when he meets – for the first time – all 27 heads of EU states in the German city of Leipzig in September.

“There’s a lot of time lost now and going to be lost because of the coronavirus. A lot of meetings have been cancelled,” Hogan told the European Parliament on Wednesday.
“If we were going to get a deal by the Leipzig summit we would have to largely have it completed by July.”

The EU trade chief, who has vowed to use trade as part of the EU’s “toolbox” in achieving geopolitical aims, also said there were still differences on major issues.

“We are making some progress with the Chinese in relation to a lot of matters, but the key issues of industrial subsidies and forced technology transfer are still not dealt with,” Hogan said.

But Tobias Gehrke, a specialist on EU-China trade at the Egmont Institute think tank in Brussels, questioned the impact of the coronavirus on the talks.

“EU negotiators have been lamenting a lack of substantive progress in the negotiations for the past year, and have increasingly voiced concern that Beijing is dragging its feet in the negotiation because it sees a strategic political window. EU leaders could push for a deal in Leipzig for its political effect, despite EU negotiation goals having fallen short,” Gehrke said.

He said there were fears in some quarters of the EU that German Chancellor Angela Merkel, who will be chairing the extraordinary summit in Leipzig, was too keen to reach a deal with China.

“The fear is that the summit in Leipzig, with 27 EU heads of states, could fall victim to dissenting EU interests: departing Chancellor Merkel looks particularly interested to see an inked deal,” Gehrke said. “This worry has led the EU Commission increasingly voice its concerns over the state of the negotiation.”

The goal to reach an agreement on investments by the end of this year was cemented in April last year, when Li offered fresh commitments to speed up talks on a decade-long effort to work on the pact.
The EU was China’s biggest trading partner in 2018, while China was the EU’s second largest.