Mirabile dictu: Europe pukes China investment deal

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The developing world order is a Cold War and grand Balkanisation between liberal and illiberal trade blocs. In this outlook, the US leads the liberal bloc versus the China-led illiberal bloc with Europe and ASEAN the key swing states. Over time, I expect the West to make it clear to the CCP that if it invades Taiwan then it can expect to be unceremoniously booted out of the global economy. The good news today is that Europe is still swinging towards the forces of good:

  • The EU parliament will tonight vote to freeze the EU-China Comprehensive Agreement on Investment.
  • The motion will also call on the EU to co-ordinate with the US and commit to more trade deals with Taiwan.
  • The EU should use the deal to leverage better human rights outcomes.

Marvellous stuff. An absolute repudiation of Angela Merkel’s China grovelling. And with her on the way out, probably the end of the deal for good.

More trade deals with Taiwan sounds like a green light for arms sales, which the EU has always steered clear of. Though I’m speculating on that.

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Either way, this is a triumph for the Biden administration and again goes to show the paradoxical efficacy of Donald Trump who simultaneously awoke the world from its China slumber but trashed the only way of dealing with it by pissing off the alliance network!

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.