EU Won't Proceed With Chinese Trade Deal Unless China Lifts Sanctions

The European Union will not proceed with a trade deal with China unless the country lifts its sanctions on EU legislators, the European Parliament said Thursday.

The EU's ratification of the multibillion-dollar investment deal with China will likely be delayed. Chinese sanctions on EU legislators were placed after the EU, Britain, Canada and the U.S. coordinated sanctions against Chinese officials amid concerns about human rights abuses in the Xinjiang region.

China's EU sanctions are "an attack on fundamental freedoms," the parliament said, adding that it is urging "Chinese authorities to lift these wholly unjustified restrictive measures." The EU wants the investment deal to solve a trade imbalance and allow for European companies in China to compete fairly with Chinese ones. Dutch Foreign Trade Minister Sigrid Kaag said the imbalance will be "tackled" but expressed worry over "human rights violations" in China.

For more reporting from the Associated Press, see below:

European Union Flags
Three EU flags are seen in front of the Berlaymont on September 24, 2020, in Brussels. Thierry Monasse/Getty Images

EU lawmakers have adopted a resolution in which they condemned "the baseless and arbitrary sanctions" imposed by Beijing on European individuals and institutions in March.

The European Parliament's criticism was echoed by European Commission Vice President Valdis Dombrovskis, who said after a meeting of EU trade ministers that China's sanctions haven't created a favorable environment for a deal to be concluded.

"We cannot see this process of ratification outside of the broader context of EU-China relations," he said.

The text was approved in 599-30 vote with 58 abstentions.

Among those targeted were five members of the European Parliament: Reinhard Butikofer, Michael Gahler, Raphael Glucksmann, Ilhan Kyuchyuk and Miriam Lexmann.

The multibillion investment accord was agreed in principle in December and needs lawmakers' approval to take effect.

In addition to the lifting of sanctions, legislators said they will take into account the human rights situation in China when deciding to green-light the multibillion-dollar deal.

The EU hopes the agreement will help correct an imbalance in market access and create new investment opportunities for European companies in China. EU companies face competition from state-owned Chinese enterprises that may get government support and easier access to financing.

"We were going to tackle the trade imbalance. But if you see what came out over the past months, we have extreme worry about human rights violations, especially if you look at slave labor," Kaag said. "And there are many companies investing in Xinjiang and it is unclear how the production happens and if slave labor is being used."

According to EU figures, China is now the bloc's second-biggest trading partner behind the United States, and the EU is China's largest trading partner. China and Europe trade on average over 1 billion euros a day.

Chinese Foreign Ministry spokesperson Zhao Lijian said Wednesday that the agreement is "a balanced, mutually beneficial and win-win agreement, not a gift from one party to the other."

"Second, China's sanctions on the relevant EU institutions and personnel who have long maliciously spread lies and false information on Xinjiang issues and seriously damaged China's sovereignty and interests are necessary to safeguard its national interests," Zhao said at a news briefing Wednesday.

"It is also a necessary, legitimate and just response to the European side's confrontation with sanctions. It is clear cut that who unreasonably provoked troubles first and who was forced to take legitimate response," Zhao said.

Valdis Dombrovskis
European Commissioner for an Economy that Works for People Valdis Dombrovskis speaks during a May 20 news conference following a European Foreign Trade ministers meeting at the European Council headquarters in Brussels. Francisco Seco/AP Photo