EU and China strike deal: fewer hybrid cars, easier access to rare earths
After two days of crisis talks in Beijing, EU trade chief Šefčovič hails a "first step": China is to curb hybrid exports and ease export licences for rare earths.
Photo: Damir Sencar / European Union / Wikimedia Commons, CC BY 4.0 (cropped and resized)
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The EU and China have averted a looming trade war for now after two days of talks in Beijing. EU Trade Commissioner Maroš Šefčovič spoke on Friday of a "crucial first step" towards more balanced trade relations following talks with Chinese Commerce Minister Wang Wentao. He said the two sides had reached a shared understanding to moderate China's exports of hybrid and plug-in hybrid vehicles to the EU. According to Šefčovič, this opens up the prospect of cutting those exports by more than half.
In return, China is to ease market access for some EU products such as car parts, olive oil and footwear. According to Euronews, these exports are worth almost four billion euros, and duty savings should total at least 225 million euros. Beijing has also pledged to simplify export licences for rare earths and permanent magnets, which Europe needs for green technology, defence and the car industry. A joint statement, however, only mentioned a "WTO-compliant" understanding on hybrid vehicles, without details.
According to EUobserver, Beijing had earlier rejected an EU demand for "voluntary export restrictions" on electric cars. The EU's trade deficit with China stands at around one billion euros a day, and every EU member state now runs a deficit. EU leaders plan to assess the results at their summit in Brussels next week. Šefčovič described the agreement as the conclusion of a first phase of negotiations.