Will the Sudden E.U.-China Deal Damage Relations With Biden?

Pushed by German Chancellor Merkel of Germany near the end of her tenure, the trade deal may complicate agreement on an effective trans-Atlantic policy toward China.

Containers at the harbor of Duisburg in western Germany last year. The trade deal includes significant benefits for German companies.
Containers at the harbor of Duisburg in western Germany last year. The trade deal includes significant benefits for German companies.Credit...Ina Fassbender/Agence France-Presse — Getty Images
Steven Erlanger

BRUSSELS — The European Union embarked on a trade deal with China believing that engagement with Beijing was the best way to alter its behavior and make it a committed stakeholder in the international system. But that was seven years ago.

The deal was quietly sealed in the final weeks of last year. By then, China had changed and so had the world. The trans-Atlantic relationship has been damaged by President Trump, with new doubts in Europe about American constancy and in America about Europe’s ambitions.

The timing — with a newly aggressive China seen as a strategic rival to the United States and just weeks before Joseph R. Biden Jr. becomes president — has opened the European Union to questions and criticism, from analysts and particularly American officials, that perhaps the deal was a diplomatic and political error.

It was concluded in the midst of China’s crackdown in Hong Kong and Xinjiang and accepts vague Chinese promises to stop the use of forced labor. It creates doubts about Europe’s willingness to heed Mr. Biden’s call to work with him on a joint strategy toward Beijing. And it has handed an important victory to China, where the deal was hailed as a great success for President Xi Jinping before the 100th anniversary of the Chinese Communist Party and confirmation of its power in the new world.

“For the trans-Atlantic relationship, it’s a slap in the face,” said Philippe Le Corre, a China scholar affiliated with Harvard’s Kennedy School and the Carnegie Endowment — especially after the Europeans in mid-November called on the incoming Biden administration to work with Europe on a joint approach to China.

“It’s damaged the trans-Atlantic relationship already,” Mr. Le Corre said, before Mr. Biden even takes office and whether or not it is ultimately ratified by the European Parliament.

ImageA video conference with European leaders and President Xi Jinping of China, top left, late last month. 
A video conference with European leaders and President Xi Jinping of China, top left, late last month. Credit...Pool photo by Sebastien Nogier

European officials say that the timing was not deliberate, but came suddenly because of last-minute concessions authorized by Mr. Xi.

But there is no doubt that the deal has long been a priority for Chancellor Angela Merkel of Germany, partly because of the huge German bet on the Chinese market and partly because she believed strongly that engagement, not confrontation, was the best policy for a declining West in the face of a fast-rising China.

For Ms. Merkel, it was the capstone of her own long march with Beijing and concluded an eventful German presidency of the European Union, with an unexpected success just before the Portuguese took over on Jan. 1.

The deal will benefit German companies most, while also laying down a marker for European interests, which are not identical to American ones — more so now after what all expect to be a lasting bitterness and distrust engendered by the Trump presidency.

“The last four years of Trump have left a stain, on Germany and Merkel especially,” Mr. Le Corre said. “There is huge disappointment and some unknowns about Biden, and the 74 million who voted for Trump shows the situation in the U.S. is far from settled,” he said. “So the Chinese said, ‘Grab it if you can’ at the end of her presidency.”

Although the text of the deal has not yet been published, there are some concessions to European business similar to those Mr. Trump got in his own Phase One deal with China, Mr. Le Corre said.

Whether those Chinese commitments will be kept is an open question, as is whether the E.U. deal will be ratified over the next year by the European Parliament, given its outrage over human-rights violations, including Wednesday’s arrests of dozens of pro-democracy activists in Hong Kong.

Janka Oertel, the director of the Asia program at the European Council on Foreign Relations in Berlin, said that the deal was modest but “less important than the timing and the politics.” Whether it ever gets ratified or not, “for the politics and the optics the damage has already been done.”

There has only been modest criticism within Germany, certainly compared with the fierce debate over the handling of the coronavirus and vaccines, she said. But there are persistent questions about whether Ms. Merkel’s China policy of quiet engagement is any longer valid, or should be the model for the future. Germany’s stance on Huawei, too, has been softer than many of its European neighbors.

Chancellor Angela Merkel of Germany, left, with other European leaders in October. A deal with China has been a priority for her.Credit...Pool photo by Olivier Hoslet/EPA, via Shutterstock

“There is tone deafness in Germany and in Brussels about this as a political victory for China,” Ms. Oertel said. Yet she and others are asking a more fundamental question: “whether you can conclude any treaty with China and rely on it,” she said. “But if you question that, you question the way we and the European Union do business.’’

The whole deal could easily have been scrapped as largely outdated, she said, or it could have been negotiated after Mr. Biden took office, when there would be “more leverage and more trans-Atlantic heft.”

Still, the divided reaction in Germany “shows you something has changed in our perception of China, that our risk assessment is far more sober, and the hopes about Chinese transformation are no longer the same as when Merkel started,” said Daniela Schwarzer, the director of the German Council on Foreign Relations.

At the same time, she said, Germany’s persistent push for such a deal despite tensions with Washington and with other Europeans who resented the haste displays a kind of realism.

“It all shows the extent foreign policy has to take into account the way our economy is built,” she said. Germany’s export-based economy and its need for reliable supply chains “all limit the scope of foreign-policy options toward China.”

By law, Biden appointees are not allowed to deal with foreign counterparts before the inauguration. But Jake Sullivan, who will be national security adviser, warned the Europeans not to rush in a Twitter message on Dec. 22, saying that the new team “would welcome early consultations with our European partners on our common concerns about China’s economic practices.”

That gentle warning was ignored. But only last Sunday, Mr. Sullivan was conciliatory in a CNN interview. He said Mr. Biden’s goal was early discussion with European allies “out of mutual respect” to work out a common agenda regarding Chinese trade practices.

“Our goal is to go out right away and sit down — not just on the question of China, but to work out the economic differences that we have so that we can end the multi-front trade war,” he said.

But Thomas Wright of the Brookings Institution said that damage had been done by European officials’ describing the deal as part of their pursuit of “strategic autonomy,” a policy pushed by President Emmanuel Macron of France that annoys many American policymakers.

The paradox of the Biden election, said François Heisbourg, a French security analyst, is that the European debate on strategic autonomy “no longer hinges around the craziness of Trump, but around the uncertainties of where the United States is going and the certainty of China.”

But the way this deal was done, he said, “in the quiet of late December and with a minimum of discussion, looks like it was done on the sly, in an underhand manner, and it stinks.”

For President-elect Joseph R. Biden Jr., Europe’s deal with China “will stay as a bitter taste,” analysts say. Credit...Kriston Jae Bethel for The New York Times

The deal will feed those in the Biden camp who believe that the Europeans are self-interested and cannot be truly reliable partners, Mr. Wright said. “Some are skeptical that Europe and especially Germany will deliver, while some think, ‘Let’s go all in with them and there’s a good chance they will deliver.’ But this tilts that argument.”

German officials explain that Europe was simply closing a long deal when China finally moved on longstanding issues, Ms. Schwarzer said. “That’s true. But it was also a choice to do it now, before Biden comes in, and it’s puzzling why this was seen as strategically smart.”

“The trans-Atlantic angle was not honestly debated,” she said, “and for trans-Atlantic relations, this will stay as a bitter taste for Biden.”