The EU-China Comprehensive Agreement on Investment : Convergence and Divergence in the Global Legal Order

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)33_Other conference paperpeer-review

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Original languageEnglish
Publication statusPresented - 27 May 2021

Conference

TitleAsian Society of International Law 8th Biennial Conference (ASIANSIL 2021)
LocationThe University of New South Wales (Zoom)
PlaceAustralia
CitySydney
Period24 - 28 May 2021

Abstract

On 30 December 2020, the European Commission unveiled the in-principle text of the Comprehensive Agreement on Investment (CAI) – a highly anticipated deal between the European Union and China that ‘lay[s] down the necessary arrangements for the liberalisation of investment’ (CAI, Art. 1(1). The CAI quickly attracted attention as well as controversy. Concluded just as the Biden administration took over the reins of worsening US-China relations, the EU-China CAI marked an alliance between two of the world’s three economic superpowers. In addition to its potential influence on future US-China and US-EU relations, the CAI is significant for capturing common ground between trading blocs with very different political arrangements and models of governance. Critics of the EU-China deal deride the EU’s naivete or wilful blindness in aligning itself with a regime that has consistently undermined human rights. Other commentators argue that since the scope of the CAI is limited to ‘the liberalisation of investment’, the CAI was not designed to be an avenue for the EU to address or alter China’s human rights track record.

Given the divisiveness of the CAI, it is important and opportune to take a step back and examine the character and value of the CAI’s promise to liberalise investment between the EU and China, and what this may mean for current reform initiatives, the future of investment regulation on domestic, regional and global scales, and the CAI’s role as a next generation investment treaty.

This panel seeks to present a more nuanced understanding of the CAI by situating the CAI in three different contexts. The first context is the world of investment treaties which the CAI is a part of. However, the CAI does not contain certain investment protection provisions, such as fair and equitable treatment, or full protection and security, which are often found in investment treaties, arguably casting doubt on its status as a treaty concluded to protect investments. Does the CAI reflect convergence towards a new breed of investment treaty with pared-down protections, or does it represent divergence from current templates for investment treaties? The second context is regional geopolitical tensions fostered by the signing of the CAI. China concluded the CAI barely a month after signing the Regional Comprehensive Economic Partnership, all in an apparent bid to hasten the decline of US political and economic influence in Asia. With increasing uncertainty over the longevity of US involvement in Asia, does the CAI point towards acquiesced Chinese dominance in Asia, or will it herald divergence in the form of a new Cold War? The third context is China’s well-publicized Belt Road Initiative and the CAI’s role within that aspirational good investment governance framework. Does the CAI and its strong emphasis on sustainable development reflect convergence towards BRI principles as the template for good investment governance, or will it entrench divergence between Chinese and other notions of good investment governance?

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The EU-China Comprehensive Agreement on Investment : Convergence and Divergence in the Global Legal Order. / WANG, Jiangyu; POULSEN, Lauge; SCHACHERER, Stefanie.

2021. Asian Society of International Law 8th Biennial Conference (ASIANSIL 2021), Sydney, Australia.

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)33_Other conference paperpeer-review