EU members agree to enter investment negotiations with China

Fri Oct 18, 2013 3:42pm EDT
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By Philip Blenkinsop and Robin Emmott

LUXEMBOURG (Reuters) - European Union governments agreed on Friday to start talks with China to remove restrictions on foreign investment and set clearer rules on doing business after months of trade disputes over Chinese solar panels and EU wine.

The decision by trade ministers from the EU's 28 member states means negotiations with China can start at a summit in Beijing on November 21, with the aim of sealing an investment agreement in the following two-and-a-half years.

The deal, reinforcing existing bilateral agreements between China and individual EU members, would seek to guarantee investors that they would be treated fairly and that their assets could not be expropriated without compensation.

The European Union also wants greater access to China and the removal of restrictions on investment in certain sectors, notably in services such as banking, or the requirement to work with a Chinese joint venture partner.

"For us it is a condition that the agreement should be about investment protection, but also about market access. That of course will be the big discussion," EU Trade Commissioner Karel De Gucht told a news conference in Luxembourg.

Trade between Europe and China has doubled since 2003 and is worth more than 1 billion euros ($1.37 billion) a day, but China receives just 2 percent of the EU's foreign investment.

European companies complain of poor treatment in China, for example being pushed into joint ventures and forced to share sensitive information.

De Gucht said it was for both sides to compromise.   Continued...

The European flag fly in front of the European Parliament in Strasbourg October 12, 2012. REUTERS/Vincent Kessler