'Kill switch' for China: EU leaders back new trade instrument
Brussels is ready to develop a tool that could quickly remove Chinese companies from the EU market. Chemicals and machinery are to be protected with quotas.
Symbolic image · Photo: KenSwe72 / Wikimedia Commons, CC BY 4.0 (cropped and resized)
At the EU summit in Brussels, leaders broadly backed the idea of a new trade instrument aimed at China, the South China Morning Post reported, citing people briefed on the talks. The so-called 'kill switch' would allow the European Commission to respond rapidly – potentially immediately – to "systemic distortions and coercive behaviour" and, in extreme cases, to close the EU market to Chinese products. France and Germany floated the idea in a joint paper last week. Commission President Ursula von der Leyen presented it as an option in her opening remarks.
Leaders also pressed for import quotas to protect the chemicals and industrial machinery sectors from Chinese competition. According to Seoul Economic Daily, France, Germany, Belgium and Denmark voiced support for swift protective measures in these sectors, and wind turbines were also flagged for further action. A senior EU official said the Commission would present a diversification instrument and a solidarity mechanism by the end of the year. European Council President António Costa called for stepping up dialogue with partners while strengthening trade tools.
The EU's annual trade deficit with China is at a record of around €360 billion. According to China's customs agency, the monthly figure hit a record $34.8 billion in September. A previously agreed car deal allows 350,000 Chinese hybrid vehicles into the EU each year. The next rounds of talks with Beijing are scheduled for January and March.