EU and China agree to curb hybrid car exports to Europe
EU trade commissioner Maroš Šefčovič announced in Beijing a deal that could cut China's hybrid car exports to the European Union by more than half. He called it the first of its kind, but stressed it is only a first step.
The European Union's trade commissioner, Maroš Šefčovič, said in Beijing on Friday that the EU and China have reached an agreement to curb Chinese exports of hybrid cars to the bloc. Šefčovič said the deal opens the prospect of cutting those exports by more than half, which would mean several million fewer plug-in and battery-powered hybrid cars over the next four years. The move comes amid fears in Europe that surging Chinese car sales could destroy parts of the domestic car industry.
Background to the talks
The negotiations with China have run since June. The trade deficit between the two sides stands at €1.18bn a day and has fuelled growing tensions. Šefčovič said it was the first time China had agreed to moderate its exports without first going through a phase of trade tension, meaning the usual investigations required before safeguards are imposed under World Trade Organization rules. He said the Chinese side recognised the political pressure building in every EU member state, where "literally thousands of job losses" are at risk from cheap imports across sectors including chemicals and textiles.
What comes next
The agreement has 16 points. Beijing and Brussels will keep negotiating on cars, export restrictions on rare earths and access to the Chinese market for more EU food and drink. China said both sides would follow procedures on company price undertakings for hybrid cars, which suggests that one way to limit sales could be higher minimum prices for Chinese cars sold in Europe. China's commerce ministry said it was willing to continue facilitating export licences for rare earths and permanent magnets destined for the EU.
Šefčovič will brief EU diplomats in Brussels on Sunday, ahead of a leaders' summit on Thursday. "This is far from the end," he told reporters.
