China News Service, Beijing, October 15 (Duan Xiujian) Recently, China and the EU reached an understanding on hybrid vehicle trade. Both parties emphasized and confirmed three basic principles: respect for facts, non-discrimination, and compliance. Experts believe that reaching a consensus through negotiations will help stabilize market expectations and bring many benefits to Chinese companies.
"Compliance mainly means that we cannot unilaterally adopt practices that do not comply with WTO rules, thus changing the basic conditions for bilateral trade." Zhou Mi, a researcher at the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, told China News Service.
According to relevant WTO regulations and practices, annual quotas are usually the average of the last three representative years, excluding surge years. According to Eurostat data, the EU will import 46,000 hybrid vehicles from China in 2023; 107,000 vehicles in 2024 and 302,000 vehicles in 2025. If we follow the normal practice of safeguard measures and calculate the average value from 2022 to 2024, China's quota will be only 70,000 vehicles; even if 2025 is added, based on the average value from 2023 to 2025, China's quota will be about 150,000 vehicles. It is obviously unreasonable to determine the quota based on this.
In the end, after arduous negotiations and consultations, the two parties reached an upward arrangement at 302,000 vehicles, which safeguarded the interests of Chinese enterprises within the rules.
Chen Huiqing, director of the Legal Services Department of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, believes that compliance can safeguard the actual interests of Chinese enterprises to the greatest extent within the scope of the rules. China reserves all rights to resort to dispute settlement and demand trade compensation within the framework of the WTO.
When it comes to non-discrimination, Cui Fan, a professor at the University of International Business and Economics and chief expert of the China World Trade Organization Research Association, believes that non-discrimination is also a basic principle of the WTO. The purpose of the EU's relevant trade measures should be to protect its related industries from the impact of import growth.
In its previous safeguard measures, the EU usually excluded FTA (free trade agreement) partners or granted special arrangements, which would essentially form discriminatory treatment against China. During the negotiations, China insisted that the EU treat all import sources equally and not allow Chinese companies to be discriminated against. Ultimately, the EU promises that any subsequent measures taken on hybrid vehicles will be global and equally applicable to other import sources, including its free trade partners, and the quota given to China will be no lower than any other import source.
Regarding respecting facts, Cui Fan believes that this is to see that China's hybrid vehicles have indeed grown rapidly in recent years, which is an objective reflection of the market competitiveness of China's hybrid vehicles.
According to the consultation consensus, the two sides reached an upward arrangement on the basis of 2025, and the quota has a fixed increase every year, ensuring the export space and stable growth of Chinese enterprises, and taking into account the reasonable concerns of the industries on both sides based on reality.
On October 14, many Chinese car companies responded.
BYD believes that the results of this consultation have created a stable, predictable and sustainable cooperation environment for China-EU hybrid vehicle trade. JAC Automobile believes that the results of this consultation have created a good environment for China's new energy vehicles to steadily enter the European market. Geely Holding Group stated that the results of this consultation have enhanced the confidence of enterprises in participating in China-EU economic and trade cooperation. Chery Automobile welcomes and supports China and Europe to continue to meet each other halfway and jointly promote the stable and long-term cooperation between China and Europe in the automotive industry.
Cui Fan believes that Chinese and European companies can learn from each other in the new track and continue to cooperate. Reaching a consensus through negotiations this time will help stabilize market expectations.
"This is a great benefit for Chinese companies to trade, invest or operate in Europe." Chen Huiqing said that companies can use this as a basis to make good arrangements for trade, investment and operations. (over)
