EU considers safeguards to curb Chinese chemicals and machinery imports
The European Union is preparing to restrict imports of Chinese chemicals and industrial machinery, following a recent agreement with Beijing to cap hybrid car exports to the bloc. A European diplomat told EUobserver on Thursday that the European Commission “showed openness” to proposing safeguard measures, which act as an emergency brake on imports and can cover entire sectors. The diplomat added that there is “broad support” among member states for the Commission to proceed.
Shift in trade strategy
Last week, trade commissioner Maroš Šefčovič agreed with Beijing to limit Chinese hybrid car imports to 350,000 next year, less than half the amount expected this year. Šefčovič described the deal as a “blueprint” for other sectors, and Commission president Ursula von der Leyen publicly echoed that view on Thursday. Under World Trade Organization rules, anti-dumping and anti-subsidy cases require Brussels to prove unfair pricing or subsidies, but safeguards need no such evidence; the Commission only has to show a surge in imports seriously harming European producers.
An EU diplomat said: “We like the idea, chemicals, machinery where there’s still a lot of Chinese overproduction needs to be managed.” However, safeguards apply to all countries, not just China, and are limited to eight years. The EU rarely uses them; its steel safeguard, aimed at China, expired in June at the eight-year limit and was replaced by a separate steel regime.
Brussels think-tank the Centre for European Reform has suggested exempting the EU’s 76 free-trade partners so measures fall mainly on China, a legal question under WTO rules. The bloc did something similar for steel, leaving out Norway, Iceland, Liechtenstein and ten other countries. The tool is still seen as temporary; before year-end, the Commission aims to present diversification tools and a mechanism to compensate companies hit by Chinese countermeasures, including an instrument to shut Chinese companies out of the EU market if necessary, as first proposed in a Franco-German paper last week.
