BRUSSELS – The European Union has entered into a trade agreement with China because it believes that engagement with Beijing was the best way to change its behavior and make it a committed stakeholder in the international system. But that was seven years ago.
The deal closed quietly in the last weeks of last year. At that time, China had changed and so did the world. The transatlantic relationship was undermined by President Trump, with new doubts in Europe about American constancy and in America about Europe’s ambitions.
The moment – with a newly aggressive China seen as a strategic rival to the United States and a few weeks before Joseph R. Biden Jr. became president – opened the European Union to questions and criticism, from analysts and mainly from American authorities, who perhaps the agreement was a diplomatic and political error.
It was completed amid China’s crackdown in Hong Kong and Xinjiang and accepts vague Chinese promises to stop using forced labor. This raises doubts about Europe’s willingness to respond to Biden’s call to work with him on a joint strategy for Beijing. And it provided an important victory for China, where the agreement was hailed as a great success for President Xi Jinping before the 100th anniversary of the Chinese Communist Party and the confirmation of its power in the new world.
“For the transatlantic relationship, it is a slap in the face,” said Philippe Le Corre, a Chinese academic affiliated with Harvard’s Kennedy School and the Carnegie Endowment – especially after Europeans in mid-November asked the new Biden government to work with the Europe in a joint approach by China.
“It has already damaged transatlantic relations,” said Le Corre, even before Biden took office and whether or not it has been ratified by the European Parliament.
European officials say the timing was not deliberate, but came suddenly because of last-minute concessions authorized by Xi.
But there is no doubt that business has long been a priority for Chancellor Angela Merkel of Germany, partly because of the huge German bet on the Chinese market and partly because she strongly believed that engagement, not confrontation, was the best policy for a West decline in the face of a rapidly growing China.
For Merkel, it was the culmination of her long march with Beijing and concluded an eventful German presidency of the European Union, with an unexpected success shortly before the Portuguese took office on January 1.
The deal will benefit German companies more, while setting a benchmark for European interests, which are not identical to Americans – even more so now, after what everyone hopes will be a lasting bitterness and distrust generated by the Trump presidency.
“Trump’s last four years have left a stain, mainly in Germany and Merkel,” said Le Corre. “There is great disappointment and some unknowns about Biden, and the 74 million who voted for Trump show that the situation in the U.S. is far from resolved,” he said. “So the Chinese said, ‘Grab it if you can’ at the end of your presidency.”
Although the text of the agreement has not yet been published, there are some concessions for European companies similar to those that Trump obtained in his own Phase One agreement with China, Le Corre said.
Whether these Chinese commitments will be kept is an open question, as well as whether the EU agreement will be ratified next year by the European Parliament, due to its outrage over human rights violations, including the arrests of dozens of pro-democracy activists in Hong Kong Wednesday.
Janka Oertel, director of the Asia program at the European Council on Foreign Relations in Berlin, said the deal was modest, but “less important than timing and politics”. Whether it is ratified or not, “for politics and optics, the damage has already been done”.
There was only modest criticism in Germany, certainly compared to the heated debate over the management of coronavirus and vaccines, she said. But there are lingering questions about whether Merkel’s China policy of silent engagement is more valid or should be the model for the future. Germany’s position on Huawei was also milder than many of its European neighbors.
“There is deafness in Germany and Brussels in this regard as a political victory for China,” said Oertel. Still, she and others are asking a more fundamental question: “whether you can conclude any treaty with China and trust it,” she said. “But if you question that, you question the way we and the European Union do business. ”
The whole deal could easily have been out of date, she said, or it could have been negotiated after Biden took office, when there would have been “more influence and more transatlantic weight”.
Still, the split reaction in Germany “shows that something has changed in our perception of China, that our risk assessment is much more sober and hopes for Chinese transformation are no longer the same as when Merkel started,” said Daniela Schwarzer, the director of the German Council on Foreign Relations.
At the same time, she said, Germany’s persistent pressure for that deal, despite tensions with Washington and other Europeans who resented the rush, shows a kind of realism.
“All of this shows the extent to which foreign policy must take into account the way our economy is built,” she said. The German export-based economy and its need for reliable supply chains “limit the scope of foreign policy options for China”.
By law, Biden’s nominees are not allowed to negotiate with foreign colleagues before taking office. But Jake Sullivan, who will be a national security adviser, warned Europeans not to rush a message on Twitter on December 22, saying that the new team “would welcome early consultations with our European partners about our common concerns about China’s economic practices”.
This kind warning was ignored. But just last Sunday, Sullivan was conciliatory in an interview with CNN. He said Biden’s goal is to discuss in advance with European allies “out of mutual respect” to work out a common agenda on Chinese business practices.
“Our goal is to get out immediately and sit down – not just on the issue of China, but to resolve the economic differences that we have so that we can end the trade war on several fronts,” he said.
But Thomas Wright of the Brookings Institution said damage was done by European officials when describing the deal as part of his search for “strategic autonomy”, a policy promoted by France’s President Emmanuel Macron that irritates many American lawmakers.
The paradox of Biden’s election, said François Heisbourg, a French security analyst, is that the European debate on strategic autonomy “no longer revolves around Trump’s madness, but on the uncertainties of where the United States is going and of China’s certainty. “
But the way this deal was done, he said, “in the silence of late December and with a minimum of discussion, it looks like it was done on the sly, in a covert way, and it stinks.”
The deal will feed those in the Biden camp who believe that Europeans have self-interests and cannot be truly trusted partners, Wright said. “Some are skeptical that Europe and especially Germany will do it, while others think: ‘We are going all in with them and there is a good chance that they will deliver.’ But that skews the argument. “
German officials explain that Europe was simply closing a long-standing deal when China finally switched to old issues, Schwarzer said. “That is true. But it was also a choice to do that now, before Biden arrives, and it is intriguing why it was seen as strategically intelligent.”
“The transatlantic angle has not been honestly discussed,” she said, “and for transatlantic relations, it will remain a bitter taste for Biden.”