Bloomberg Audio Studios, podcasts, radio News. We're here joined by Marosofkovic, who is the Trade Commissioner for the European Union. We have so much to talk about about the relationship with the United States, China, Mercos or this Latin American trade deal that's supposed to be signed this weekend. We'll see if we get to that. Commissioner, thank you so much
for joining us here. I'd like to begin with the negotiations with the United States, because I think a lot of people are not very clear on where we are, particularly on the negotiations for stealing aluminum thus fifty percent tariffs. What progress has main where are we right now?
I was very pleased with the outcome of the visit of my two principal counterparts, Secretary Latnique and Amasada Grier, and I think we kind of reconfirm also in front of the our industry because we had the meeting with CEOs that if it comes to steal and steal products but not each other problem because we export to each other really minimum amounts. But what unites us is that we needly need to take care of over capacities which
are destroying the steel production. As also in the EU, and I explain again that we adopted these very far reaching safeguards if it comes to the imports of steel from the third countries to the EEL, which are kind of very much reflecting the measures which US has undertaken
several months ago. And therefore I suggested again let's go back to the idea where we can kind of build this ring of friends where we would trade on MFM or zero levels and we will have the same, let's say, measures to take on the global over capacities.
The situation as it stays right.
Now is that I sent to Secret Latin the lists of the codes where we believe that we can definitely lower the tariffs. I understand there is some interest, especially from the machinery machinary sector, but we didn't proceed or having proceeded to the very concrete negotiations on this type.
So we're talking on the level of teams.
We are almost i would say, in peramanunt in contact with my counterparts, and I think this would be good for both sets, because if America wants to re industrialize, they need machines.
We produce them machines.
We are ready to send them the machines but of course we need to find the solution on the derivatives.
And when Secretary Lotnik was here, we caught up with him. He came on Bloomberg Television and he said that basically, in order to make progress on steal and aluminum, there needs to be movement on regulations for digital industry. So basically, stuff that's outside of trade that the United States considers non trade barriers or non tariff barriers within is that something that is on the table in terms of the negotiation.
Could that be part of a framework and is there any other avenue to get those tears down other than basically diminishing European tech regulation.
I think that our regulation is adopted democratically by US through very thorough legislative process, and therefore we are of course going to protect our text sovereignity. What I heard from Secretary Latin and Amasatagreer was that they wanted to be treated fairly. So we had a lot of discussions. Are we aiming only at the US Company's clear answer is no, Just just look at the companies which we are investigating or eventually funny and are we kind of,
you know, favoring the European companies in this case. Again no, and I was just providing my both counterparts with the fact that a lot of of these investigations are actually prompted by the complaints which are coming from American companies which are also located here in the They want to make sure that US companies have treated fairly in non
discriminatory manner. When we would use more I would say, the possibility of the of the settlement than fines, and all these things been also discussed with American partners, also by my colleagues who are responsible for these sectors.
And speaking of sort of rare earth minerals is obviously it has been thrust into this sort of the conversation very in a very sort of obvious way. Now by the China.
Are we getting closer?
Is Europe getting closer to getting a general license from China as the United States has?
Yes, I think that there I can say that we are in a very close contacts with Foreign Trade Minister Mankmental and also his team, so we are communicating on different levels. We had here the team from China specializing on export controls like a couple of weeks ago, and I think we are getting initial reports from our industry that they are getting these general licenses, but we need to have a little bit more granual information.
To evaluid the whole process.
But the fact that this idea was favorably received, that it seems that we are getting first general licenses, and also that the Chinese side was receptive to our arguments that the processes it was set up in April required too much of a it's a very intrusive information, too many photographs, too much detail about the supply chains, and and I think that the general licensing could be could be one of the solutions out to address this issue.
Does that mean that there's going to be a regime that governs this sort of issue between the EU and China or is it still just kind of being hopeful that things don't change.
Basically, I think that we kind of.
Set up the kind of hotline with the Minister a Bankmentao FOROL priority cases. So we are talking on our level quite regularly, but especially our teams are in permanent contacts, because indeed, we had the moments over the last year where on my table I saw that pile of the of the of the of the letters from the warried CEOs of different new companies about the lack of permanent magnets like of legacy chips and so on and so forth was really growing quite rapidly and we needed to
address it. So now I think that we set up the good channels on working level and political level to address this issue.
But it's a challenge.
It brings additional instability into how the global supply chain has been working, and therefore my message to the European industry is you have to be prepared to pay security premium.
We have to.
Stockpile, we have to diversify, because we learned the hard way how the dependencies are costly, and therefore we included it into this new look, new communication on economic security because weach simply have to be much better in managing these emergencies.
And one of the costs of imbalance and the sort of dependencies has been sort of evident in the trade balance with China and something that Emmanuel and Macron has been very critical of, particularly in the last week or so after his visit to Beijing, saying that there should be a more aggressive approach to dealing with the oversupply
that is going into Europe. Do you think there is appetite to deal more aggressively with this question from China, And do you think that the trade deforicit with China specifically should be targeted by the EU and that is something that they should be looking to close.
Clearly, I would say the deficit of three hundred billion is way too high. This was the topic which was raised by me with my counterparts from the moment one when I first time came for the visit to China. And I think that there's also very clear message from our side that we'll fight tooth and nail for our European jobs and European European companies and to have the
deficit of three hundred billion on permanent basis unsustainable. So we are looking at different possibilities how to address this issue. Maybe one interesting information for you would be that we set up such as import surveillance taskcores which are monitoring I would say, the inflows of the goods on bibyicle basis, and this is what constitutes I would say, the basis for our next steps.
And if three hundred and fifty billion is too high for you, is a more reasonable figure? What is the kind of goal? So we can think talk concretely about kind of what we should be aiming for, and is the anti coursion device, for example, something that is on the table and trying to achieve that goal.
I think that before we went to I would say the most I would say to the strongest, strongest instrument in our arsenal. What would be very important for us would be to see the tendencies. Are the European companies in China treated fairly?
Do we have access, you know, to.
Some of the programs and public procurement, how the issue of the handling of overcapacity is happening and the investments are done in you are the real investment? Are we talking about the I p R transfer? Are we talking about creating real valuated in Europe? Are we talking about
creation of the of the real job? So what would be very important is the tendency and I would say engagement with us to address this The issues which you are raising without Chinese counterparts really already for quite some.
Time, and it seemed going into sort of at the end of last week or in the middle of last week, that Mercosore was more or less a done deal. There now appears to be some question about that. What do you think are the chances that Mercosore goes into the fact that it is signed this weekend.
They're going to use every every every minute of this week to get it done, because I think to end this turbulent year from the perspective of the such a global trader like European Union with the biggest free trade agreement ever signed, I think would be a positive conclusion
to this year. That's a big deal with lots of opportunities for not only European exporters but also in the field of critical row minimals, accessibility, and I'm sure that in the end it would be very positive deal also for our ugly food industry, which is paying very high tiives if they tried to export anything to Americos. So we really very diligently listen to our farmer's community, and I believe that we found the responses to every single concern they had.
I just hope that they will look at it carefully. We are ready to explain it.
We are discussing it with our member states in the Parliament, and I hope that we'll end up on the positive note.
And just very quickly after twenty five years of negotiation, which is how long this has sort of been going place. If we do not get it over the line in this next couple of weeks, can we consider this sort of initiative to be dead.
Let's think positive, and I would never accept such a good deal like we negotiate it between Mercosur and European Union. Is dead because it's just simply too good for our citizens and too good for our businesses.