A first step, but no real rebalancing in the European Union’s trade deal with China

According to Bruegel, EU Trade Commissioner Maroš Šefčovič returned from the 8-9 October EU-China Trade and Investment Consultations in Beijing with three ‘shared understandings’[1].Euronews reports that the EU will introduce country-specific quotas allowing 350,000 Chinese hybrid cars onto the European market annually over four years[2]. An EU official told Euronews this "will cut by more than half the current exports to the EU"[2].Bruegel notes that Europe's bilateral trade deficit with China is €360 billion, and Chinese automotive exports to the EU are worth around €15 billion[1]. The think tank says China's tariff cuts on goods such as car parts, olive oil and footwear would save some €225 million in duties – again, marginal compared to the overall trade deficit[1].In Bruegel's view, Beijing's main interest is preventing the European Council from implementing its trade tools[1]. It says the deal would be China's most important gain[1] if leaders treat it as a good start and put off further measures.Euronews reports concerns in Brussels that the agreement could take the urgency out of efforts to develop tougher trade measures[2]. An EU official told the outlet that "we need to continue to keep the guns on the table"[3]. It said that if the hybrid deal is copied in other sectors, it would represent a major breakthrough in managing import competition from China[4].Peter Chase of the German Marshall Fund told Euronews the deal shows "the Chinese are now beginning to take Europe seriously"[2].