EU-China investment deal ‘very important,’ Germany’s Merkel says as Brussels pauses ratification efforts over sanctions fallout

A huge investment agreement between the EU and China is “important,” Chancellor Angela Merkel said, a day after a senior European Commission figure stated that the bloc had suspended ratification efforts amid soured relations.

“Despite all the difficulties that will surely arise with the ratification, it is a very important undertaking, because it gives us more reciprocity in market access,” Merkel said in a speech on Wednesday.

Addressing her conservative CDU/CSU political alliance, she said the deal was “mutually beneficial,” but added that it was important to tackle the “the whole range of issues” with China, including its human rights record.

On Tuesday, Valdis Dombrovskis, the executive vice-president of the European Commission, told the AFP news agency the EU had halted efforts to ratify the comprehensive agreement on investment, which allows European companies greater access to the Chinese market.

Dombrovskis said EU-Chinese relations were “not conducive” to the deal’s ratification after the bloc slapped sanctions on Beijing over alleged human rights abuses in the Xinjiang region.

Beijing has repeatedly denied accusations that Uighur Muslims are subjected to forced labor in Xinjiang, and responded to the bloc’s move with its own counter-sanctions against EU officials.

As well as her comments about the China deal, Merkel also said she would like to see a trade agreement struck between the EU and its “most important ally,” the US.

The Chancellor said such a deal would “make a lot of sense,” and could be similar to the EU’s existing trade agreement with Canada.