MILWAUKEE, Wisconsin — China and the EU “are definitely not there yet” on a prospective trade deal, Commissioner Maroš Šefčovič told POLITICO Thursday, calling months of talks “constructive, but tough.” But the EU’s top trade official also emphasized the political pressure he is under to find that elusive common ground with Beijing. The EU and China have been locked in tense negotiations since June. EU leaders have said they can no longer tolerate the flood of Chinese imports inundating the single market, putting pressure on domestic manufacturers and forcing plant closures and layoffs.
Cutting that deficit would require either reducing imports from China, boosting EU exports, or a mix of the two. Šefčovič said he hopes to bring a “proof of concept” back from Beijing that addresses three main issues: sudden Chinese export surges in key industrial sectors; tangible ways to increase European goods exports to China; and long-term clarity regarding China’s export curbs on raw materials, especially rare earth elements. While in Milwaukee, Šefčovič met with Chinese Vice-Minister Li Chenggang.
The veteran Slovak commissioner said China understands Europe’s worries: “All the issues we suggested are on the table. I’m not saying that we have clear-cut reassurances that we will solve them, but they are on the table.” “Some of these topics have been very difficult to put on the agenda in the past. I believe this reflects the understanding of how politically important this is for both of us.” The bilateral consultations have been divided into four work streams: trade and investment balancing; export controls; intellectual property rights; and reform of the World Trade Organization.
One person with knowledge of the negotiations, who asked to remain anonymous due to the sensitivity of the talks, said the Commission was seeking a settlement with China that would involve a mix of bilateral agreements on certain product categories, coupled with unilateral restrictions on others. The Commission will present the outcome of the negotiations to EU leaders at their mid-October meeting in Brussels. The leaders will then decide whether the results are satisfactory.
French President Emmanuel Macron on Wednesday criticized China for unfairly subsidizing its domestic producers and urged the Commission to deploy more safeguards to protect European industry. China has also signaled that it’s ready to fight back. Responding to an as-yet-unpublished Franco-German position paper that is expected to urge an upgrade to the EU’s trade defenses, a spokesperson for the Commerce Ministry said China would take “firm action” against any moves to restrict goods from entering the European single market.
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