Biden camp adds pressure on EU to hit brakes on China deal

The European Union came under mounting pressure to slow down its push for a major investment deal with China, as opposition grew to any agreement with Beijing that fails to tackle forced labor.

Jake Sullivan, national security adviser to US President-elect Joe Biden, weighed in with a tweet late on Monday referencing a story on the proposed EU-China accord. He urged "early consultation with our European partners on our common concerns about China's economic practices."

The EU wants the Comprehensive Agreement on Investment to open up China's market and eliminate discriminatory practices, but critics say that it would in turn reward Beijing with preferential access to European markets despite moves to crush dissent in places from Hong Kong to Xinjiang. A deal would be a "symbolic victory" for China, and could make it harder to forge transatlantic unity on China, according to Mikko Huotari, director of the Mercator Institute for China studies in Berlin.

Both sides have set a deadline of the end of the year, but the negotiations could yet stumble if Beijing refuses to budge over key demands on how it treats its workers. The European Parliament passed a resolution on Dec. 17 condemning China's use of forced labor in Xinjiang, and called for the investment accord to include commitments to respect international conventions banning such practices.

'Totally Baseless'
"There is no such thing as so-called forced labor in Xinjiang," Chinese Foreign Ministry spokesman Wang Wenbin said at a regular press briefing in Beijing on Tuesday. "The relevant accusation is totally baseless. It smears and slanders against the Xinjiang region and the Chinese side." Wang didn't say what commitments China would be prepared to make on labor issues.

Several European lawmakers and China analysts have expressed concern that the EU and especially Germany, as holder of the bloc's rotating presidency and the EU nation with the deepest trade ties to China, may be prepared to set aside labor issues in its rush for a deal by year's end. They urge holding off until talks can take place with the Biden administration on a common approach to China. The European Parliament will have a say in approving any EU-China deal.

Bernd Lange, a German Social Democrat who chairs the European Parliament's trade committee, said the fact an agreement was near despite such concerns was "clearly worrying."

"Trade policy does not take place in a vacuum," he said on Twitter. "How the question of forced labor is addressed will determine the agreement's fate."

No Surprises
Chinese Foreign Minister Wang Yi discussed the negotiations for an agreement during a working lunch on Monday with EU country ambassadors as well as Nicolas Chapuis, head of the EU delegation in Beijing. In a statement, the EU noted progress in the ongoing talks and said that both sides are in "continuous contact to address outstanding issues."

Human-rights activists say the so-called re-education centers and vocational training programs in the mainly Muslim Xinjiang region are de facto detention camps, while a recent report by prominent researcher Adrian Zenz claimed that slave labor is deployed to pick cotton in the region. The Chinese Foreign Ministry has repeatedly denied such claims.

Among the key items Brussels had been seeking from China was the ratification of International Labour Organization fundamental conventions, including the ability for Chinese workers to form independent labor unions.

Communist Collapse
China has only one official trade union that covers all industries. Beijing has long been spooked by the prospect of organized labor and how it could evolve into a political force, much like the Polish labor union Solidarity did, eventually triggering the collapse of the Communist Party across the eastern bloc. At least one analyst at a Chinese think tank has described the EU's demand on labor unions as "unlikely or impossible" for China to accept.

"We believe as long as both can accommodate the other side's concerns and meet each other half way, we will be able to achieve the targets set by our leaders," the Foreign Ministry's Wang Wenbin said on Monday, describing the talks as "in the final stage."

Wang Huiyao, an adviser to China's cabinet, said he thinks it's possible that a deal can be concluded soon but warned that any demands such as those on labor show a lack of understanding of China's situation. "We have to be realistic," he said.

Disclaimer: This article first appeared on bloomberg.com, and is published by special syndication arrangement.