Recent media reports indicate that the EU and China are making progress in long-running negotiations towards a deal to remove barriers to foreign investment. Agreement may potentially be reached by the end of 2020, after seven years of often difficult talks.
Negotiations regarding an EU-China investment agreement initially kicked off in 2013. The aim of the agreement is to provide certainty, protection and predictable market access for EU and China investors, with the key sticking points to date relating to labour rights, sustainable development and reciprocity of investor rights. However, even with a deal reportedly now in sight, talks could still come unstuck (or be prolonged into 2021), particularly if these key issues continue to pose difficulties.
Although there are still challenges to overcome, the promising signs in the talks demonstrate that opportunities for trade and investment between the EU and China remain very real. A common theme addressed by this blog is expanding foreign investment screening regimes meaning investors increasingly may need to comply with prior notification rules, and be prepared to make a positive case regarding the national security impact of their investments. However on a fundamental level, the EU remains very much open to, and receptive towards, foreign investment, and will not stand in the way of legitimate and beneficial transactions.
Stay tuned to Baker McKenzie’s Foreign Investment and National Security Blog for further updates and developments regarding the foreign investment review landscape, as we head into what is likely to prove an equally significant 2021.