China and the European Union have reached an agreement that could cut Chinese exports of hybrid vehicles to the EU by more than half, European Trade Commissioner Maroš Šefčovič said on Friday after talks in Beijing aimed at reducing the EU’s rapidly growing trade deficit with China. Reuters reports, UNN writes.
Details
According to Šefčovič, the "common understanding" reached will make it possible to "curb" exports of Chinese hybrid and plug-in hybrid vehicles to the EU. This will reduce imports by several million vehicles over four years. Following the two-day talks, he did not provide details on the mechanism for implementing the agreement.
Against the backdrop of this news, shares in European automakers, which have steadily fallen over the past two years due to U.S. tariffs and the rapid growth of Chinese exports, rose overall.
The agreement was preceded by three months of talks between Šefčovič and Chinese officials, including Commerce Minister Wang Wentao. They marked another stage in the years-long disputes between Beijing and Brussels over the rapid growth of Chinese exports, particularly automobiles.
EU leaders will discuss the results of the talks at the beginning of a summit in Brussels next Thursday. They must determine whether this agreement marks the beginning of a rebalancing of the EU’s trade deficit with China, which has grown to more than €1 billion ($1.12 billion) per day.
The chair of the European Parliament’s Committee on International Trade said the hybrid agreement should be extended to other sectors and that the EU should also apply trade-defense measures more effectively.
According to Šefčovič, the parties also reached agreements on reducing China’s import tariffs on certain goods from the EU with a total value of about €4 billion, including auto parts, olive oil and footwear. In addition, they agreed to simplify China’s procedure for issuing export licenses for rare-earth elements and permanent magnets.