Bow-Tie Briefing – BIT or CAI? Regardless of name, new China – EU investment agreement offers key motivator for economic growth and positive opportunities for corporate travel (part 2)

In our last edition of Bow-Tie Briefing, we discussed the background of the China-EU Bilateral Investment Treaty" (BIT) or as the European side call it the "EU-China Comprehensive Agreement in Investment (CAI). President Xi Jinping of China stated: "It will greatly boost world economic recovery in the post-pandemic era, enhance the international community's confidence in economic globalisation and free trade, and enable the Chinese and EU's markets to make important contributions to building an open world economy".

In our previous column we Illustrated the first two market access commitments by China, i.e. manufacturing and services. In this edition we introduce the commitments on "fair competition".

State owned enterprises:

• China to ensure that SOEs active in the market take decisions solely based on commercial considerations;
• China to ensure that SOEs do not discriminate European companies when they buy goods or services from them or sell goods or services to them;
• China to share information and consult if the behaviour of SOEs affects EU investors.

Transparency in subsidies:

• Obligations on transparency as regards subsidies provided in the services sector;
• Commitment to share information and to consult on specific subsidies that could have a negative effect on the investment interests of the EU.

Forced technology transfers:

• Clear prohibition of investment requirements that compel transfer of technology;
• No interference in contractual freedom in technology licensing;
• Protection of confidential business information.

Standard setting, authorisations, transparency:

• Equal access to standard setting bodies for EU companies;
• Enhanced predictability in authorisations;
• Stronger legal certainty through transparency rules for regulatory and administrative measures.

Sustainable development + effective implementation and dispute settlement:

• Commitments to respect core ILO principles and to effectively implement the ratified ILO Conventions;
• Specific commitment on the ratification on ILO fundamental Conventions on forced labour;
• Commitment to effectively implement the Paris Climate Agreement;
• Transparent resolution of disagreements by an independent panel of experts and with the involvement of civil society.

The agreement now needs to undergo "legal scrubbing" and to be signed by the two sides, before it is ratified and enters into force. On the EU side, it will have to be ratified by the European Parliament (there is no need for ratification by the national parliaments of the EU member states). This process is estimated to take around one year. In addition, China and the EU set themselves a two year deadline for the conclusion of negotiations on an additional investment protection agreement.

Similar to RCEP, in the short foreseeable future, a lot of new potential corporate travel will be anticipated, and hopefully this will be another locomotive to support our travel industry.😊

Bow-Tie Briefing shares the views of Benson Tang, a corporate travel thought leader and executive director of the CTC -Corporate Travel Community. Benson's remarkable career in travel started more than 25 years ago and his extensive knowledge of the corporate travel sector has made him a sought-after speaker and lecturer.