EU Commission proposes to open negotiations for a BIT with China, by José Ángel Rueda

On 23 May 2013 the European Commission decided to ask EU Member States for their agreement on a mandate to open negotiations on an investment agreement with China.[1] As the Commission has underlined, “this is the first ever proposal for a stand-alone investment agreement since foreign direct investment became the exclusive competence of the EU under the Lisbon Treaty” on 1 December 2009.

The press release issued by the European Commission also states that “An EU-China investment agreement would streamline the existing bilateral investment protection agreements between China and 26 EU Member States into a single, coherent text. The main objectives of an agreement at EU level are to improve the protection of EU investments in China as well as Chinese investments in Europe, improving legal certainty regarding treatment of EU investors in China, reducing barriers to investing in China and, as a result, increasing bilateral investment flows. It should also, crucially, cover improved access to the Chinese market – addressing important issues like mandatory joint ventures.”

Once the agreement enters into force it will substitute the following 25 BITs existing between China and 26 EU Member States (date of signature)[2]:

Belgium and Luxembourg, 4 June 1984 and 6 June 2005

Bulgaria, 27 June 1989 (+ additional protocol of 26 June 2007)

Czech Republic, 8 December 2005

Denmark, 29 April 1985

Germany, 1 December 2003

Estonia, 2 September 1993

Greece, 25 June 1992

Spain, 14 November 2005

France, 26 November 2007

Italy, 28 January 1985

Cyprus, 15 January 2001

Latvia, 15 April 2004

Lithuania, 8 November 1993

Hungary, 29 May 1991

Malta, 22 February 2009

Netherlands, 26 November 2001

Austria, 12 September 1985

Poland, 7 June 1988

Portugal, 10 December 2005

Romania, 12 July 1994 (+ additional protocol of 16 April 2007)

Slovenia, 13 September 1993

Slovakia, 4 December 1991 (+ additional protocol of 7 December 2005)

Finland, 15 November 2004

Sweden, 29 March 1982 (+ protocol amendment of 27 September 2004)

United Kingdom, 15 May 1986

In addition, it will be the first BIT in force between China and Ireland.

Finally, there is no mention as to whether China will include Hong Kong SAR or Macau SAR within the territorial scope of this agreement. It is to note that several EU Member States have notified the European Commission that they want to maintain in force or permit to enter into force the BITs they signed with Hong Kong and Macau, as follows[3]:

Belgium & Luxembourg-Hong Kong BIT, 7 October 1996.

Denmark-Hong Kong BIT, 2 February 1994.

Germany-Hong Kong BIT, 31 January 1996

France-Hong Kong BIT, 30 November 1995

Italy-Hong Kong BIT, 28 November 1995

Netherlands-Hong Kong BIT, 19 November 1992

Netherlands-Macau BIT, 22 May 2008

Austria-Hong Kong BIT, 11 October 1996

Portugal-Macau BIT, 17 May 2000

Finland-Hong Kong BIT, 2 July 2009

Sweden-Hong Kong BIT, 27 May 1994

United Kingdom-Hong Kong BIT, 30 July 1998

As in our previous conclusion, should China so decides, the abovementioned BITs would also be superseded by the proposed EU-China agreement.