Italian Embrace Of China’s BRI


The Italian Economy has been facing third recession in a decade whereby FDI in Italy amounted to 18.2 billion Euros less than half what it got in 2007 i.e. 48.1 billion Euros. The recession in Italian economy meant its looking for new avenues of investments amid a shrinking global trade, isolationist US & austerity driven EU in Brussels. This makes China a very lucrative option for Italy’s newly elected populist government who is even willing to sign up to China’s Belt & Road initiative to boost its flagging economy. Thus the administration of Free Port of Trieste lead by its president Zeno D’s Agostino is hoping to sign slew of deals with China’s Communication Construction Company (CCCC) during President Xi’s visit to Italy on March 22nd, 2019. Zeno Agostino aims to make north eastern free port of Trieste into Singapore or Hongkong. The free port of Trieste could be an important point of connection for China’s silk road initiative through Mediterranean & Suez onward to mainland Europe.

However there are several legal & geopolitical tangles which could emerge out of a deal between Italy & China on BRI through Trieste port. The international Free Port of Trieste was established under UNSC Resolution no. 16 of 1947 after a peace agreement signed between Allied & associated powers with Italy on 10th February 1947. The Treaty of Peace establishes Free Port of Trieste with UN Trusteeship of the port militarily to NATO & civil administration to Italian government. Thus any deal between Italian government & China to sell shares in companies setup in Trieste or part of the port project ownership to Chinese companies would tantamount to Italian violation Treaty of Peace & exceeding the UN Trusteeship mandate. There are already murmurs of dissent against Italian handling of Trieste port & how it should declare itself independent of Italy.

The Chinese Communication & Construction Company (CCCC) which plans to sign contracts with Trieste port in Italy has faced numerous investigations of fraud in 100 countries and was black listed by World Bank in 2009 for fraudulent practices in infrastructure projects like Philippines highway, Malaysia two rail projects that were halted and even an investigation by Canada into an alleged acquisition of a construction company. Italian signing up for BRI with China has been met with furious response from US who has been warning allies of any deals with China apart from barring Huawei from operating 5G Network. The Italian government under severe domestic & international pressure has walked back on any agreement on Huawei participation in 5G Technology. However the last word in this saga has not been said as China plans to extend BRI to Trieste port whose security is entrusted with NATO & Italy under the UN mandate.

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