Speaker 1: Bloomberg Audio Studios, podcasts, radio News. We're here joined by Marosofkovic,
Speaker 1: who is the Trade Commissioner for the European Union. We
Speaker 1: have so much to talk about about the relationship with
Speaker 1: the United States, China, Mercos or this Latin American trade
Speaker 1: deal that's supposed to be signed this weekend. We'll see
Speaker 1: if we get to that. Commissioner, thank you so much
Speaker 1: for joining us here. I'd like to begin with the
Speaker 1: negotiations with the United States, because I think a lot
Speaker 1: of people are not very clear on where we are,
Speaker 1: particularly on the negotiations for stealing aluminum thus fifty percent tariffs.
Speaker 1: What progress has main where are we right now?
Speaker 2: I was very pleased with the outcome of the visit
Speaker 2: of my two principal counterparts, Secretary Latnique and Amasada Grier,
Speaker 2: and I think we kind of reconfirm also in front
Speaker 2: of the our industry because we had the meeting with
Speaker 2: CEOs that if it comes to steal and steal products
Speaker 2: but not each other problem because we export to each
Speaker 2: other really minimum amounts. But what unites us is that
Speaker 2: we needly need to take care of over capacities which
Speaker 2: are destroying the steel production. As also in the EU,
Speaker 2: and I explain again that we adopted these very far
Speaker 2: reaching safeguards if it comes to the imports of steel
Speaker 2: from the third countries to the EEL, which are kind
Speaker 2: of very much reflecting the measures which US has undertaken
Speaker 2: several months ago. And therefore I suggested again let's go
Speaker 2: back to the idea where we can kind of build
Speaker 2: this ring of friends where we would trade on MFM
Speaker 2: or zero levels and we will have the same, let's say,
Speaker 2: measures to take on the global over capacities.
Speaker 3: The situation as it stays right.
Speaker 2: Now is that I sent to Secret Latin the lists
Speaker 2: of the codes where we believe that we can definitely
Speaker 2: lower the tariffs. I understand there is some interest, especially
Speaker 2: from the machinery machinary sector, but we didn't proceed or
Speaker 2: having proceeded to the very concrete negotiations on this type.
Speaker 3: So we're talking on the level of teams.
Speaker 2: We are almost i would say, in peramanunt in contact
Speaker 2: with my counterparts, and I think this would be good
Speaker 2: for both sets, because if America wants to re industrialize,
Speaker 2: they need machines.
Speaker 3: We produce them machines.
Speaker 2: We are ready to send them the machines but of
Speaker 2: course we need to find the solution on the derivatives.
Speaker 1: And when Secretary Lotnik was here, we caught up with him.
Speaker 1: He came on Bloomberg Television and he said that basically,
Speaker 1: in order to make progress on steal and aluminum, there
Speaker 1: needs to be movement on regulations for digital industry. So basically,
Speaker 1: stuff that's outside of trade that the United States considers
Speaker 1: non trade barriers or non tariff barriers within is that
Speaker 1: something that is on the table in terms of the negotiation.
Speaker 1: Could that be part of a framework and is there
Speaker 1: any other avenue to get those tears down other than
Speaker 1: basically diminishing European tech regulation.
Speaker 2: I think that our regulation is adopted democratically by US
Speaker 2: through very thorough legislative process, and therefore we are of
Speaker 2: course going to protect our text sovereignity. What I heard
Speaker 2: from Secretary Latin and Amasatagreer was that they wanted to
Speaker 2: be treated fairly. So we had a lot of discussions.
Speaker 2: Are we aiming only at the US Company's clear answer
Speaker 2: is no, Just just look at the companies which we
Speaker 2: are investigating or eventually funny and are we kind of,
Speaker 2: you know, favoring the European companies in this case. Again no,
Speaker 2: and I was just providing my both counterparts with the
Speaker 2: fact that a lot of of these investigations are actually
Speaker 2: prompted by the complaints which are coming from American companies
Speaker 2: which are also located here in the They want to
Speaker 2: make sure that US companies have treated fairly in non
Speaker 2: discriminatory manner. When we would use more I would say,
Speaker 2: the possibility of the of the settlement than fines, and
Speaker 2: all these things been also discussed with American partners, also
Speaker 2: by my colleagues who are responsible for these sectors.
Speaker 1: And speaking of sort of rare earth minerals is obviously
Speaker 1: it has been thrust into this sort of the conversation
Speaker 1: very in a very sort of obvious way. Now by
Speaker 1: the China.
Speaker 3: Are we getting closer?
Speaker 1: Is Europe getting closer to getting a general license from
Speaker 1: China as the United States has?
Speaker 2: Yes, I think that there I can say that we
Speaker 2: are in a very close contacts with Foreign Trade Minister
Speaker 2: Mankmental and also his team, so we are communicating on
Speaker 2: different levels. We had here the team from China specializing
Speaker 2: on export controls like a couple of weeks ago, and
Speaker 2: I think we are getting initial reports from our industry
Speaker 2: that they are getting these general licenses, but we need
Speaker 2: to have a little bit more granual information.
Speaker 3: To evaluid the whole process.
Speaker 2: But the fact that this idea was favorably received, that
Speaker 2: it seems that we are getting first general licenses, and
Speaker 2: also that the Chinese side was receptive to our arguments
Speaker 2: that the processes it was set up in April required
Speaker 2: too much of a it's a very intrusive information, too
Speaker 2: many photographs, too much detail about the supply chains, and
Speaker 2: and I think that the general licensing could be could
Speaker 2: be one of the solutions out to address this issue.
Speaker 1: Does that mean that there's going to be a regime
Speaker 1: that governs this sort of issue between the EU and
Speaker 1: China or is it still just kind of being hopeful
Speaker 1: that things don't change.
Speaker 3: Basically, I think that we kind of.
Speaker 2: Set up the kind of hotline with the Minister a
Speaker 2: Bankmentao FOROL priority cases. So we are talking on our
Speaker 2: level quite regularly, but especially our teams are in permanent contacts,
Speaker 2: because indeed, we had the moments over the last year
Speaker 2: where on my table I saw that pile of the
Speaker 2: of the of the of the letters from the warried
Speaker 2: CEOs of different new companies about the lack of permanent
Speaker 2: magnets like of legacy chips and so on and so
Speaker 2: forth was really growing quite rapidly and we needed to
Speaker 2: address it. So now I think that we set up
Speaker 2: the good channels on working level and political level to
Speaker 2: address this issue.
Speaker 3: But it's a challenge.
Speaker 2: It brings additional instability into how the global supply chain
Speaker 2: has been working, and therefore my message to the European
Speaker 2: industry is you have to be prepared to pay security premium.
Speaker 3: We have to.
Speaker 2: Stockpile, we have to diversify, because we learned the hard
Speaker 2: way how the dependencies are costly, and therefore we included
Speaker 2: it into this new look, new communication on economic security
Speaker 2: because weach simply have to be much better in managing
Speaker 2: these emergencies.
Speaker 1: And one of the costs of imbalance and the sort
Speaker 1: of dependencies has been sort of evident in the trade
Speaker 1: balance with China and something that Emmanuel and Macron has
Speaker 1: been very critical of, particularly in the last week or
Speaker 1: so after his visit to Beijing, saying that there should
Speaker 1: be a more aggressive approach to dealing with the oversupply
Speaker 1: that is going into Europe. Do you think there is
Speaker 1: appetite to deal more aggressively with this question from China,
Speaker 1: And do you think that the trade deforicit with China
Speaker 1: specifically should be targeted by the EU and that is
Speaker 1: something that they should be looking to close.
Speaker 2: Clearly, I would say the deficit of three hundred billion
Speaker 2: is way too high. This was the topic which was
Speaker 2: raised by me with my counterparts from the moment one
Speaker 2: when I first time came for the visit to China.
Speaker 2: And I think that there's also very clear message from
Speaker 2: our side that we'll fight tooth and nail for our
Speaker 2: European jobs and European European companies and to have the
Speaker 2: deficit of three hundred billion on permanent basis unsustainable. So
Speaker 2: we are looking at different possibilities how to address this issue.
Speaker 2: Maybe one interesting information for you would be that we
Speaker 2: set up such as import surveillance taskcores which are monitoring
Speaker 2: I would say, the inflows of the goods on bibyicle basis,
Speaker 2: and this is what constitutes I would say, the basis
Speaker 2: for our next steps.
Speaker 1: And if three hundred and fifty billion is too high
Speaker 1: for you, is a more reasonable figure? What is the
Speaker 1: kind of goal? So we can think talk concretely about
Speaker 1: kind of what we should be aiming for, and is
Speaker 1: the anti coursion device, for example, something that is on
Speaker 1: the table and trying to achieve that goal.
Speaker 2: I think that before we went to I would say
Speaker 2: the most I would say to the strongest, strongest instrument
Speaker 2: in our arsenal. What would be very important for us
Speaker 2: would be to see the tendencies. Are the European companies
Speaker 2: in China treated fairly?
Speaker 3: Do we have access, you know, to.
Speaker 2: Some of the programs and public procurement, how the issue
Speaker 2: of the handling of overcapacity is happening and the investments
Speaker 2: are done in you are the real investment? Are we
Speaker 2: talking about the I p R transfer? Are we talking
Speaker 2: about creating real valuated in Europe? Are we talking about
Speaker 2: creation of the of the real job? So what would
Speaker 2: be very important is the tendency and I would say
Speaker 2: engagement with us to address this The issues which you
Speaker 2: are raising without Chinese counterparts really already for quite some.
Speaker 1: Time, and it seemed going into sort of at the
Speaker 1: end of last week or in the middle of last week,
Speaker 1: that Mercosore was more or less a done deal. There
Speaker 1: now appears to be some question about that. What do
Speaker 1: you think are the chances that Mercosore goes into the
Speaker 1: fact that it is signed this weekend.
Speaker 2: They're going to use every every every minute of this
Speaker 2: week to get it done, because I think to end
Speaker 2: this turbulent year from the perspective of the such a
Speaker 2: global trader like European Union with the biggest free trade
Speaker 2: agreement ever signed, I think would be a positive conclusion
Speaker 2: to this year. That's a big deal with lots of
Speaker 2: opportunities for not only European exporters but also in the
Speaker 2: field of critical row minimals, accessibility, and I'm sure that
Speaker 2: in the end it would be very positive deal also
Speaker 2: for our ugly food industry, which is paying very high
Speaker 2: tiives if they tried to export anything to Americos. So
Speaker 2: we really very diligently listen to our farmer's community, and
Speaker 2: I believe that we found the responses to every single
Speaker 2: concern they had.
Speaker 3: I just hope that they will look at it carefully.
Speaker 3: We are ready to explain it.
Speaker 2: We are discussing it with our member states in the Parliament,
Speaker 2: and I hope that we'll end up on the positive note.
Speaker 1: And just very quickly after twenty five years of negotiation,
Speaker 1: which is how long this has sort of been going place.
Speaker 1: If we do not get it over the line in
Speaker 1: this next couple of weeks, can we consider this sort
Speaker 1: of initiative to be dead.
Speaker 2: Let's think positive, and I would never accept such a
Speaker 2: good deal like we negotiate it between Mercosur and European Union.
Speaker 2: Is dead because it's just simply too good for our
Speaker 2: citizens and too good for our businesses.