After hybrid deal with China, EU plans new trade defence tools in December

The European Commission plans to propose new trade defence measures in December to reduce the EU's trade deficit with China and its reliance on China for critical supplies, Reuters reported on Monday, citing a senior Commission official. The plans include an instrument to limit companies' dependence on a single source for certain critical goods and a programme to support industries and regions hit by trade measures imposed by third countries. EU leaders are due to discuss them at their final summit of the year on Dec. 17-18; China is already first on the agenda at the summit starting Thursday.

The move follows Friday's agreement under which China will cap hybrid car exports to the EU at 350,000 vehicles a year, with the quota rising 6% annually for four years, expected from early December. Without the deal, Chinese hybrid exports to the EU could have reached 800,000 units this year, according to Reuters; the market share of China-built cars is expected to fall from about 12% to around 6%. According to Euronews, Beijing also agreed to ease licensing for rare earths. The EU's trade deficit with China exceeds 1 billion euros a day.

Dialogue must deliver results, and it did, the Commission official said, but on its own it is unlikely to solve the structural imbalances. Other EU officials told Euronews they feared the deal could breed complacency at the summit. "It's not the end of the story," an EU diplomat said. Next steps include a video call by Trade Commissioner Maroš Šefčovič in January and political talks in March, Euronews reported.