The European Commission said efforts to ratify a massive investment deal with China were in fact put on hold after tit-for-tat sanctions were imposed for China’s treatment of its Uyghur population in March.

“We have now in a sense suspended … political awareness activities on the side of the European Commission,” the executive vice-chairman of the committee, Valdis Dombrovskis, said on Tuesday. He said the current state of relations between Brussels and Beijing was “not conducive” to ratifying the agreement, which is known as the EU-China Comprehensive Agreement on Investment.

“It’s clear in the current situation with the EU’s sanctions in place against China and the Chinese counter-sanctions in place, including against members of the European Parliament. [that] the environment is not conducive to ratifying the agreement, ”said Dombrovskis. He added that it will now “really depend on how the EU-China relationship develops”.

The European Union and China approved a controversial investment deal at the end of December after seven years of marathon negotiations. German Chancellor Angela Merkel gave a final impetus to the discussions; the Chinese market is particularly important for German automakers and manufacturers with a strong presence in the country.

At the time, the pact was championed as a long-awaited opening to the vast Chinese market that would benefit European companies. If ratified, it could lead Beijing to relax some of its notoriously strict rules on foreign companies, such as the need to operate through joint ventures with local partners.

The conclusion of the negotiations was a diplomatic victory for Chinese leader Xi Jinping. The talks concluded with a video call with Xi, European Commission President Ursula von der Leyen, French President Emmanuel Macron and Merkel herself.

But the deal has angered Chinese skeptics and human rights activists in Europe.

Some of them had long pressured Brussels to impose sanctions on China for its abuses of its Uyghur population and its policies in Hong Kong. The Biden administration has also publicly expressed its displeasure.

Then, in a dramatic turn of events in March, the European Union imposed sanctions on four Chinese officials involved in Beijing’s Xinjiang policy. In response, China quickly imposed counter-sanctions that targeted several high-level members of the European Parliament, three members of national parliaments, two EU committees and a number of China-focused European academics.

Analysts said Dombrovskis’ comments on Tuesday were not surprising and reflected the deterioration in relations between Beijing and Brussels in recent months. The chances of relaunching the process, according to Michael Reiterer, distinguished professor at the Brussels School of Governance, seem bleak.

“As long as members of the European Parliament are on the sanctions list – impossible,” he said.