EU should revive talks on broader China trade deal, top MEP says

A broader EU-China trade agreement would address trade and investment issues across the relationship. It could include the investment provisions once discussed in the Comprehensive Agreement on Investment, alongside export restrictions, unfair subsidies, and public procurement. The aim is to tackle problems that affect many European industries at once.

Separate negotiations focus on one sector at a time. For example, the recent hybrid-car deal sets country-specific quotas for Chinese vehicles. A broader agreement would also examine rare-earth licensing, subsidies in chemicals and machinery, and a 20% surcharge on EU bids for Chinese public contracts. These measures operate across or beyond a single industry.

Bernd Lange said the EU should seek a comprehensive deal soon because endless negotiations make no sense. The hybrid-car agreement is described as a first phase, while technical talks continue before political discussions scheduled for March 2027. The wider proposal could therefore connect sector-specific action with broader trade rules.

The article reports that the EU runs a deficit of around €1 billion a day with China. A trade deficit means the value of goods an economy imports exceeds the value of goods it exports. Measured daily, the figure highlights the continuing scale of the EU’s imbalance with China.

The number is especially striking because it accumulates across the whole relationship, rather than coming only from cars. The article links the imbalance to concerns about Chinese trade practices in several industries, including chemicals and machinery. It also mentions restricted EU access to rare-earth exports and a surcharge on EU public-procurement bids.

The EU considers the hybrid-car agreement insufficient to correct this broader problem. Brussels is therefore seeking wider negotiations, while also using trade-defence measures. The reported daily deficit helps explain why lawmakers want an agreement covering investment and cross-industry practices instead of isolated sector deals.

The Comprehensive Agreement on Investment, or CAI, was a previous attempt by Brussels and Beijing to set wider investment rules. It could have become part of a broader economic relationship, but it was never ratified by the European Parliament. The agreement therefore remains politically frozen rather than operating as a completed pact.

The Parliament froze ratification in 2021 after China imposed retaliatory sanctions. Those sanctions followed EU measures concerning human-rights abuses. This sequence turned the investment agreement into part of a larger diplomatic dispute, not simply a trade negotiation. The article does not detail the sanctions or the EU measures.

Bernd Lange suggested that the investment part of the CAI could be worth revisiting. He also called for a comprehensive agreement to be reached soon. Any renewed discussion would therefore need to address investment while navigating the political tensions that previously stopped parliamentary ratification.

The new arrangement would control Chinese hybrid-car exports to the EU through country-specific quotas. The European Commission says China agreed to halve its hybrid-car exports over four years. The quotas would allow 350,000 Chinese hybrid cars into the European market each year, with a fixed annual adjustment rate of 6%.

The mechanism is a numerical limit rather than a broad ban. It gives Chinese exporters a defined amount of annual market access, while restricting exports beyond that arrangement. For European car manufacturers, this could reduce the pressure created by rapidly expanding Chinese competition in the hybrid-car market. The article does not quantify any resulting change in European production or prices.

The Commission calls the agreement a first phase. Technical negotiations will continue until political talks scheduled for March 2027. The deal may therefore provide immediate protection for the car sector, but it does not settle the EU’s wider concerns about trade practices or the overall deficit.

The EU describes unfair practices as problems that can damage several industries at once. These include Chinese export restrictions, unfair subsidies, and unequal conditions in public procurement. The concern is not limited to competition in one product, such as cars. It covers the rules and costs shaping manufacturers’ ability to compete.

The article gives three concrete examples. China imposes strict licensing requirements on EU businesses seeking to export rare earths, which European industry considers essential. The EU also cites unfair subsidies in chemicals and machinery. In Chinese public procurement, EU bids face a 20% price surcharge, making them less competitive before contracts are awarded.

Pascal Canfin calls these horizontal unfair practices because their effects can spread across industries. The Commission is negotiating sector by sector, but lawmakers want broader action too. EU leaders have given the Commission a mandate to introduce unilateral quotas protecting chemicals and machinery, showing the urgency Brussels attaches to the issue.

The negotiations involve EU institutions and Chinese bodies at several levels. The European Commission negotiates on behalf of the 27 EU member states and has proposed trade-defence measures. European Parliament lawmakers, including Bernd Lange and Pascal Canfin, will visit Beijing. They are due to meet China’s Ministry of Commerce and National People’s Congress, plus high-tech businesses in Hangzhou.

The lawmakers do not all emphasize the same approach. Canfin wants negotiations to address horizontal unfair practices affecting multiple industries. Lange supports a comprehensive agreement that could include investment. The article also notes that Spain favors a softer approach toward Beijing because it wants to secure Chinese investment.

These differences reflect competing priorities inside the EU. Some governments want stronger protection for European manufacturers, while others prioritize continued economic engagement and investment. The EU is therefore trying to maintain dialogue with China while enforcing measures such as quotas. The visit from 27 to 29 October is part of that balancing effort.

A trade deficit occurs when the value of goods an economy imports exceeds the value of goods it exports to its trading partner. The difference is the shortfall. In the article, the EU’s deficit with China is around €1 billion a day, showing that the EU buys substantially more from China than China buys from the EU.

Several conditions can widen such an imbalance. Chinese subsidies may lower the prices of exported goods, making them more competitive in Europe. Export restrictions, such as licensing requirements for rare earths, can limit what European businesses sell or buy. A 20% surcharge on EU bids in Chinese public procurement can also reduce European access to Chinese demand.

The article connects these concerns to chemicals, machinery, cars, and other industries. The EU wants broader rules because separate sector deals may not address the underlying conditions. It is combining dialogue with quotas and other trade-defence measures to protect European industry while continuing negotiations.