This policy note was published on January 20. Its sources are research interviews, and what was known of early drafts of the EU-China Comprehensive Agreement on Investment as of mid-December 2020. The actual text of the political agreement between the EU and China has now been released on January 22.
Changes to our analysis are as follows:
- A preamble now mentions a common commitment to fight "climate change and forced labor". The text also states that "each Party shall make continued and sustained efforts on its own initiative to pursue ratification of the fundamental ILO conventions No. 29 and 105, if it has not already ratified them". In our view, the mention "on its own initiative" should be read as a qualifier, since it seems to exclude the review of this commitment between the Parties.
- Our analysis mentioned a commitment to finalize the negotiation of the missing investment chapter within a maximum of two years after signing the agreement. The final text states that "the two Parties will endeavour [italics added] to complete such negotiations within two years of the signature of this agreement".
- There are two distinct processes for implementation of the agreement: one for general investment issues and another for issues pertaining to sustainable development. What our note described applies only to general investment issues. The "Investment Committee" constituted by the participants in the High Level Economic and Trade Dialogue (HED) meets once a year, and can "adopt binding interpretations of the provisions of this Agreement". The Working Group on investment meets twice a year – or within 30 days on "urgent matters". This strengthens the path of political arbitrage that seems to be the preferred path in the CAI. For those issues under sustainable development, the text merely mentions that another Working Group consisting of "senior officials" shall meet once a year.
Finally, a key part of the CAI is still missing from the text published on January 22: most of the Annexes, which should actually list the sectors that are open to investment, and make eventual reservations and exclusions.