Taking the EU reins, Slovenia plans to press ahead on China investment deal

·4-min read

Slovenia will press on with completing the EU’s troubled investment deal with China as it assumes the presidency of the Council of the European Union on Thursday.

The presidency rotates among EU member states and is responsible for the functioning of the council, the EU’s co-legislative body alongside the European Parliament.

The tiny Balkan nation begins its six-month stint at a time of great flux for EU-China relations, and after parliament has frozen consideration of the deal, the Comprehensive Agreement on Investment (CAI) following Beijing’s sanction on some members.

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Slovenian ambassador to the EU Iztok Jarc said that while the geopolitical situation made things “a bit more difficult”, Slovenia would continue the technical work to ensure that the deal was ready to go should things change.

“It is in everyone’s interest to progress with one of the most important economic partners of the EU. So Slovenia will be probably during our semester working more on the technical level, looking at the agreement, preparing necessary documents in order to prepare everything necessary for the possible conclusion and ratification later in the next phase,” Jarc said.

The agreement was reached in principle in December, and the initial plan was to ratify the CAI during France’s turn at the helm from January 1, 2022. The deal needs approval from both the parliament and the council to take effect.

However, the European Parliament voted in May to pause all discussions about the CAI unless China removes the economic sanctions and travel bans it put on five members of the European Parliament in March after the EU had imposed sanctions on Chinese officials for alleged human rights abuses in Xinjiang.

Beijing also sanctioned the parliament’s human rights subcommittee, which has 34 members and 25 substitutes.

EU-China investment deal on hold as MEPs vote to halt talks

Despite this, the European Commission – which negotiated the deal with China – has continued technical preparations, including legal scrubbing and translations of the deal.

Jarc said that during its presidency, Slovenia would also seek to step up collaboration with China on climate issues ahead of the 26th UN Climate Change Conference of the Parties (COP26) in October and November.

“Of course the European Union and Slovenia are very much interested in promoting fair and equal opportunities and to facilitate trade and investment between the European Union and China,” he said.

Analysts do not expect major shifts in EU-China ties under Slovenia’s watch.

Prime Minister Janez Janša has been happy to go against the grain on social issues – last week he was one of the few EU leaders to side with Hungarian President Viktor Orban over a law that bans schools from using materials seen as promoting homosexuality, even while he was pilloried by other counterparts.

China’s European investments in downward trend, 10-year low: report

But on foreign policy – especially China policy – he has been more in line with Western alliances.

“Although on some areas Slovenia appears to support the rogue countries of the EU, like Hungary, in terms of China they have a pro-American stance,” said Nina Pejic, a China researcher at the University of Ljubljana.

“The only one [in the Slovenian government] who is looking at China in a more positive way is the Minister of Economic Development Zdravko Pocivalsek, who is the voice of economic cooperation. But he openly acknowledges that the government is not so supportive of his stances on China.”

In August, Slovenia signed onto then-US secretary of state Mike Pompeo’s “Clean Network” campaign against Chinese technology, a non-binding agreement that signalled that Ljubljana was on the same page as Washington over use of “non-trusted” suppliers of 5G technology.

Slovenian Prime Minister Janez Jansa has gone against the EU grain on social issues, but has taken a pro-US stance on foreign policy. Photo: Reuters
Slovenian Prime Minister Janez Jansa has gone against the EU grain on social issues, but has taken a pro-US stance on foreign policy. Photo: Reuters

The initiative is widely seen as a mechanism to ban Chinese companies such as Huawei Technologies from Western telecoms infrastructure.

Still, Beijing has continued to pursue engagement with Slovenia, which remains a part of the 17+1 group of Central and Eastern European countries. The group is part of a push by Beijing to boost infrastructure and economic ties with the region but it suffered a setback when Lithuania quit earlier this year, citing less-than-expected trade benefits.

Politburo member Yang Jiechi, China’s top diplomat, visited Slovenia in May and met President Borut Pahor. According to a Chinese readout of the meeting, Pahor said “Slovenia is willing to play a positive role in promoting EU-China relations and cooperation” with China.

The accompanying Slovenian readout simply said that Borut received Yang “for an exchange of views on international issues”.

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