The key facts
- Bernd Lange (S&D, Germany) called for a broad agreement with China, including investments, citing the frozen CAI
- Hybrid car deal of 9 October: quota of 350,000 cars per year, halving Chinese exports over four years
- Visit of 12 MEPs to China on 27–29 October; the EU received a mandate for unilateral quotas for chemicals and machinery
Call for a broad agreement
The European Union should seek a broad trade agreement with China, potentially including investments as well, instead of continuing sector-by-sector negotiations, said on Wednesday the chair of the European Parliament's trade committee Bernd Lange, a German socialist. His remarks came ahead of a visit by 12 MEPs to Beijing planned for next week, amid efforts by Brussels and Beijing to reduce growing trade tensions. “A more comprehensive agreement is needed. I am also in favour of concluding it fairly soon — endless negotiations make no sense,” Lange told journalists. He added that it would be worth returning to the frozen Comprehensive Agreement on Investment (CAI), in particular to its investment part. Parliament froze the ratification of the CAI in 2021 after China imposed retaliatory sanctions in response to EU measures over human rights violations.
The hybrid deal and its limitations
On 9 October the sides reached an agreement on hybrid cars: China agreed to halve their exports to the EU over the next four years. The EU will introduce country-specific quotas allowing 350,000 Chinese hybrids annually with a fixed annual adjustment of 6%. The Commission presented the deal as the “first phase” of negotiations, which will continue at technical level until political consultations in March 2027. However, according to Euronews, Brussels considers the agreement insufficient to address the trade imbalance: the EU's deficit in trade with China stands at around €1 billion a day.
Horizontal threats and the agenda of the visit
French liberal Pascal Canfin, who will also join the delegation, warned that the EU must look beyond individual sectors. “We are open to negotiating sector by sector, but at the same time we look at what is not a sectoral threat. This is the risk of horizontal unfair practices that could very negatively affect our industries,” the outlet quoted him as saying. From 27 to 29 October the MEPs will meet with representatives of China's Ministry of Commerce and the National People's Congress, as well as, as expected, with representatives of high-tech businesses in Hangzhou. Lange listed other topics of a future agreement: Chinese export restrictions — Beijing requires strict licensing of exports of rare earth metals needed by European industry — unfair subsidies in the chemical and machinery sectors, as well as a 20% price premium for EU bids in public procurement.
Brussels' balancing act
The EU, as characterised by Euronews, is walking a tightrope in its relations with Beijing: while promoting dialogue, it is simultaneously applying trade defence measures. Last week EU leaders gave the Commission a political mandate to introduce unilateral quotas to protect the chemical and machinery industries due to the urgency of the threat from Chinese competition. At the same time, some member states, such as Spain, advocate a softer approach to Beijing, seeking to attract Chinese investment.
