As trade growth slides, China and the EU should tap the potential for investment cooperation
Zhang Monan says trust and non-state actors can play key roles as the two sides seek to fast-track investment links and open up their services trade
A major reason has been sharply decelerating growth in global trade, which the World Trade Organisation expects to grow by 1.7 per cent this year – far below the 6.7 per cent average in the decade preceding the 2008 crisis.
With trade alone no longer capable of underpinning global cooperation, it is time to add more investment linkages to the mix.
There is plenty of work ahead to conclude a treaty. But that is no reason to delay the expansion of investment cooperation
As it stands, there is no real global-level investment framework. But the G20 recently approved the world’s first programmatic document on multilateral investment, the G20 Guiding Principles for Global Investment Policymaking. The general framework it provides could be particularly valuable for China and the European Union, as they attempt to negotiate a bilateral investment treaty.
So far, there have been several rounds of talks, focusing on increased investment protection and market access. Many more rounds are on the way, as some significant issues – including guarantees of regulatory transparency and the creation of an effective dispute-settlement mechanism – have yet to be fully agreed.