By hannover-web.com On October 25, Minister of Commerce Wang Wentao held a video conference with Valdis Dombrovskis, the European Commission’s Executive Vice President and Trade Commissioner.
One notable detail from this meeting was that China initiated the video conference regarding the ongoing negotiations on electric vehicles between China and Europe. According to Dombrovskis’ social media updates, he was in Brazil on the same day attending the G20 Trade Ministers’ meeting. Reports indicate that negotiations began around 11 PM local time in Brazil and ran into the early hours of the morning.
This clearly shows that even amid a hectic schedule, he opted to engage in discussions with the Chinese side at such a late hour. He has consistently emphasized the importance of maintaining communication rather than creating barriers, especially since the European Commission had launched an anti-subsidy investigation into Chinese electric vehicles.
Another point of interest is that this video conference took place less than a week before the EU’s final ruling on tariffs on Chinese electric vehicles, scheduled for October 30. However, both sides reached a significant consensus during the talks: they agreed to pursue further negotiations. This implies that even if the European Commission proceeds with imposing tariffs on October 30, discussions can continue, allowing China to negotiate with Europe regarding the cancellation of these tariffs.
At the heart of this new phase of negotiations is a key principle: both sides are committed to resolving issues through price commitments. This entails establishing a mutually acceptable minimum export price for Chinese electric vehicles entering the European market, with exporters promising not to sell below this price.
Achieving such a price commitment agreement relies heavily on mutual trust—an aspect that China has actively worked to build throughout negotiations with Europe. Reports indicate that China’s technical team has spent 25 days in Brussels, conducting eight rounds of intensive, 50-hour discussions with their European counterparts. This effort was aimed at moving the negotiations forward and included many constructive proposals from the Chinese side.
In contrast, sources noted a distinct lack of trust and sincerity from the European side during the negotiations. A key issue has been the use of ‘tactics’ by the Europeans to bypass direct discussions with the Chinese government, opting instead to negotiate with individual companies and employing other means to delay progress.
During the recent talks, both parties acknowledged that while significant progress was made in some areas through hard work, major differences remain regarding core concerns for both Chinese and European industries. These discrepancies are closely tied to the European side’s approach.
Back on August 24, China’s legitimate negotiating representative, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, formally submitted a proposal for price commitments to the European Commission. However, after agreeing to review the Chinese draft, the European side began to introduce elaborate requirements regarding technical details relating to these price commitments.
For instance, determining a minimum price requires a standard, and typically, a unified minimum price would be set for each major product category. China proposed a feasible scheme for setting a minimum price for electric vehicles based on conventional standards. However, the European technical team demanded that China establish separate minimum prices for each brand and model of electric vehicle shipped to Europe, complicating negotiations significantly.
This approach would greatly increase the complexity of the discussions since automobiles come in various brands and models, and each model may have tailored features for consumers. The idea of creating minimum prices for so many detailed categories was deemed impractical by experts.
Moreover, while the European side insists on a price commitment agreement being “supervisable” and “enforceable,” the operational reality casts doubt on this feasibility. For instance, a single company exporting thousands of electric vehicles would need to make numerous declarations per shipment as per European requirements, rendering the process unmanageable.
This tactic by the European side clearly aims to prolong negotiations and secure more negotiating chips. The Chinese side has stated an unwavering commitment to principles of equality and mutual benefit, emphasizing that both Chinese and European companies should work collaboratively to expand their business rather than create obstacles for each other. If the negotiating companies don’t see tangible benefits, effective outcomes are unlikely. The Chinese side also warned that if Europe is resolute in blocking progress, it must recognize the possible repercussions, which might directly affect European automakers.
Currently, a key reason for European carmakers investing in China is to foster technological collaboration, accelerating their own transitions to new energy sources. Any discriminatory measures from the EU could eliminate the incentive for Chinese firms to partner with European companies in China.
In light of these dynamics, the tone of the October 25 negotiations seemed to shift slightly, with reports indicating that the European side tentatively proposed some solutions to the ongoing issues, suggesting a potential opening for progress. Although the window for significant alterations before the October 30 deadline is limited, negotiations are expected to continue until a resolution is achieved.
Additionally, discussions hinted that the European technical team might visit China for the first time, an outcome both parties would welcome.
