(Bloomberg) -- The European Union said it still sees “significant remaining gaps” with Beijing after eight rounds of negotiations aimed at avoiding tariffs on Chinese-made electric vehicles that are due to kick in by the end of this month.
The EU’s trade chief, Valdis Dombrovskis and Chinese Minister of Commerce Wang Wentao had a video call Friday to discuss the progress of discussions so far, according to a statement from Olof Gill, European Commission spokesperson for trade and agriculture. The two agreed to continue technical talks in the near future.
The two sides discussed whether an agreement can be reached on so-called price undertakings, a complex mechanism to control the prices and volumes of exports that could replace the anti-subsidy tariffs. The EU has repeatedly said that any solution needs to align with the rules of the World Trade Organization, address the impact of China’s subsidies, and be something the EU can monitor for compliance.
The bloc has been exploring individual pricing agreements with some carmakers, which could partially avoid the new tariffs only for some models covered by the agreements. However, China has warned exporters against seeking individual deals with the EU as it wants all manufacturers under a common umbrella agreement as part of the talks, which are being led by a Chinese trade body.
During the call, the EU’s trade commissioner told his Chinese counterpart that under WTO rules the bloc has the possibility to offer price undertakings to different companies, and its negotiations with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products don’t exclude talks with individual exporters, according to the statement.
China described the meeting as “candid and constructive.” Despite progress made in some areas, major differences still exist on core issues of mutual concern, according to a statement from the Chinese Ministry of Commerce.
Beijing agreed to immediately launch the next phase of talks and would welcome the European team in China, it said. Wang called for conducting further discussions about price undertakings on a “pragmatic and balanced” basis and hopes to achieve “substantive breakthroughs” as soon as possible, the ministry added.
China has responded to the EV tariffs with probes of its own on dairy, pork and brandy, as well as by raising the possibility of hiking levies on cars with large engines. The EU has said it will defend its interests against any unsubstantiated investigation and is already challenging China’s dairy probe at the WTO.
Without an agreement, EVs made in China will face levies as high as 45% with regulation introducing new tariffs due by Oct. 30.
--With assistance from Foster Wong and Cecile Vannucci.
(Updates with Beijing’s comments from sixth paragraph)
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