EU to set quota of 350,000 hybrid cars from China — The Guardian

The European Union will limit imports of hybrid electric vehicles from China to 350,000 cars per year. The quota will take effect in December under a four-year agreement concluded in Beijing last week, The Guardian reports.

Quota through WTO mechanisms

The European Commission expects the new restriction to halve China’s share of the EU market, from the current 6% to 3%. According to the publication, imports of such vehicles have been growing over the past two years, and around 800,000 battery electric vehicles and plug-in hybrids could be sold in the European Union this year.

The annual limit will be introduced using World Trade Organization safeguard measures. This makes it possible to quickly impose the quota without investigations normally required for anti-dumping measures. Vehicles imported above the set amount will not be subject to duties, but will remain blocked at customs in European ports.

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Exemptions and agreements

The quota will not apply to Chinese cars assembled in the EU, including in Hungary and, in the future, Spain. At the same time, cars of European companies manufactured in China will fall under the restrictions.

As part of the agreements, China also agreed to remove some tariffs on auto components and halve duties on footwear, olive oil and ice cream from the EU. Officials stressed that China supports the quota, while dialogue on cars and other goods, including chemicals, renewable energy and furniture, will continue.

The agreement was concluded amid EU concerns over its trade deficit with China, which amounts to around £1 billion (€1.18 billion) a day. European leaders are also set to discuss a Franco-German proposal for a new mechanism that would allow Brussels to restrict certain goods’ access to the single market in the event of harmful actions, such as a ban on supplies of rare-earth elements.