China and EU avert trade conflict with ‘understanding’ on hybrid cars
European trade commissioner says Beijing has agreed to restrict vehicle exports in deal that shows negotiation ‘brings results’
On Friday, EU Trade Commissioner Maroš Šefčovič confirmed an agreement with China to curb hybrid vehicle imports and enhance access to rare earths. This diplomatic resolution aims to address the growing trade imbalance but European leaders seek stronger measures to level the playing field. They plan to review the details at a Brussels summit next week.
The EU is bracing for a record trade deficit with China of €1 billion daily due to a surge in cheap Chinese imports. Šefčovič's Beijing trip involved two days of intensive talks with counterpart Wang Wentao to rebalance EU-China trade relations. The EU hopes the deal will reduce China's exports by over half, while improving access to the Chinese market for EU products, including car parts, olive oil, and footwear, worth almost €4 billion.
The agreement also involves facilitating China's rare earths and permanent magnets exports, crucial for Europe's green technology, defense, and automotive industries. Šefčovič described the agreement as the conclusion of the first phase of negotiations, which began in June. The EU is keen for concrete results from its trade negotiations with China, with all EU countries now running trade deficits with the nation.
Recent calls for strong action against unfair Chinese trade practices have emerged from Germany, France, and MEPs, urging the European Commission to take decisive measures if necessary.
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