China and the European Commission appeared close to announcing a landmark agreement this week that would make it easier for their companies to invest in each other’s economies.
Then it hit another snag: A tweet by a top aide to Joe Biden signaled that the president-elect was not happy about the deal.
The pact, nearly seven years in the making, remains a top priority of Chancellor Angela Merkel of Germany because it would give companies like Daimler and Volkswagen better control over their operations in China.
China, which has long been wary of allowing foreign companies greater access, seems eager to strike a deal now before the new US administration can try to rally a united front against Chinese policies and actions, as Biden has pledged to do.
Their efforts, and an expected announcement Tuesday, have instead run headlong into the growing animosity toward China and increasingly vocal opposition in the final rounds of talks.
In the European Parliament, the pact faces significant opposition from members who say it does not do enough to open China’s economy or to stop Chinese human rights violations. In Washington, members of the incoming administration openly flagged that they hoped Europe would wait.
Biden’s choice as national security adviser, Jake Sullivan, wrote on Twitter on Monday that the new administration “would welcome early consultations with our European partners on our common concerns about China’s economic practices.”
If a deal comes to pass, it would be an unexpected diplomatic victory for China after a year in which its international standing plummeted over its obfuscation about the pandemic, its aggressive actions in Hong Kong and the South China Sea, and most recently a fierce dispute with Australia.
The agreement also faces opposition for what it does not address. Critics have already complained that the deal does not do enough to open China’s markets, to honor previous pledges on trade and the environment or to address human rights abuses, including forced labor and the mass internment of Uighurs and other Muslims in the far western region of Xinjiang.
Any finalized deal could be a significant blow to Biden’s ambitions on trade. He has sharply criticized President Donald Trump for antagonizing Europe and other allies with his global trade wars and has promised to work more closely with like-minded governments to counter China’s unfair economic practices.