© Reuters. FILE PHOTO: An attendant walks past EU and China flags ahead of the EU-China High-level Economic Dialogue at Diaoyutai State Guesthouse in Beijing, China June 25, 2018. REUTERS/Jason Lee

BRUSSELS (Reuters) – The European Commission has dialled down efforts to promote its planned investment agreement with China, recognising that EU lawmakers will not approve any such deal while Beijing maintains sanctions on five of their colleagues.

The Commission said in a statement on Wednesday that the China comprehensive agreement on investment (CAI) could not be divorced from other EU-Chinese developments and that the sanctioning of EU lawmakers was “unacceptable and regrettable”.

“The prospects for CAI’s ratification will depend on how the situation evolves,” the Commission said.

That came after EU trade chief Valdis Dombrovskis told Agence France-Presse on Tuesday the EU executive had “in a sense” suspended political outreach activities and that the environment was not conducive for ratification of the agreement.

The EU executive has hailed the CAI, struck at the very end of 2020, as a means to secure better access for European companies to Chinese markets and redress unbalanced economic ties.

But concerns over China’s human and labour rights record and scepticism from the United States had already cast doubt on the deal’s approval process even before Chinese blacklisting of five members of the European Parliament in tit-for-tat sanctions.

For the time being, the Commission is giving the agreement a legal review and translating into EU languages, with the parliament only likely to review it in 2022.

Dombrovskis has recognised that the CAI will struggle to secure acceptance in the European Parliament, where Social Democrats and Greens oppose it.

French President Emmanuel Macron and German Chancellor Angela Merkel support the deal, but the CAI will only be ratified after Germany’s election in September, when Merkel will have stepped down.

This could make a difference, particularly if the Greens are part of the next government in Berlin.

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