WEBVTT - EU Trade Commissioner Maroš Šefčovič Talks International Trade

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News. We're here joined by Marosofkovic,

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<v Speaker 1>who is the Trade Commissioner for the European Union. We

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<v Speaker 1>have so much to talk about about the relationship with

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<v Speaker 1>the United States, China, Mercos or this Latin American trade

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<v Speaker 1>deal that's supposed to be signed this weekend. We'll see

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<v Speaker 1>if we get to that. Commissioner, thank you so much

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<v Speaker 1>for joining us here. I'd like to begin with the

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<v Speaker 1>negotiations with the United States, because I think a lot

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<v Speaker 1>of people are not very clear on where we are,

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<v Speaker 1>particularly on the negotiations for stealing aluminum thus fifty percent tariffs.

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<v Speaker 1>What progress has main where are we right now?

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<v Speaker 2>I was very pleased with the outcome of the visit

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<v Speaker 2>of my two principal counterparts, Secretary Latnique and Amasada Grier,

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<v Speaker 2>and I think we kind of reconfirm also in front

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<v Speaker 2>of the our industry because we had the meeting with

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<v Speaker 2>CEOs that if it comes to steal and steal products

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<v Speaker 2>but not each other problem because we export to each

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<v Speaker 2>other really minimum amounts. But what unites us is that

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<v Speaker 2>we needly need to take care of over capacities which

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<v Speaker 2>are destroying the steel production. As also in the EU,

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<v Speaker 2>and I explain again that we adopted these very far

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<v Speaker 2>reaching safeguards if it comes to the imports of steel

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<v Speaker 2>from the third countries to the EEL, which are kind

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<v Speaker 2>of very much reflecting the measures which US has undertaken

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<v Speaker 2>several months ago. And therefore I suggested again let's go

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<v Speaker 2>back to the idea where we can kind of build

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<v Speaker 2>this ring of friends where we would trade on MFM

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<v Speaker 2>or zero levels and we will have the same, let's say,

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<v Speaker 2>measures to take on the global over capacities.

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<v Speaker 3>The situation as it stays right.

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<v Speaker 2>Now is that I sent to Secret Latin the lists

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<v Speaker 2>of the codes where we believe that we can definitely

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<v Speaker 2>lower the tariffs. I understand there is some interest, especially

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<v Speaker 2>from the machinery machinary sector, but we didn't proceed or

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<v Speaker 2>having proceeded to the very concrete negotiations on this type.

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<v Speaker 3>So we're talking on the level of teams.

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<v Speaker 2>We are almost i would say, in peramanunt in contact

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<v Speaker 2>with my counterparts, and I think this would be good

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<v Speaker 2>for both sets, because if America wants to re industrialize,

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<v Speaker 2>they need machines.

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<v Speaker 3>We produce them machines.

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<v Speaker 2>We are ready to send them the machines but of

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<v Speaker 2>course we need to find the solution on the derivatives.

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<v Speaker 1>And when Secretary Lotnik was here, we caught up with him.

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<v Speaker 1>He came on Bloomberg Television and he said that basically,

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<v Speaker 1>in order to make progress on steal and aluminum, there

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<v Speaker 1>needs to be movement on regulations for digital industry. So basically,

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<v Speaker 1>stuff that's outside of trade that the United States considers

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<v Speaker 1>non trade barriers or non tariff barriers within is that

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<v Speaker 1>something that is on the table in terms of the negotiation.

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<v Speaker 1>Could that be part of a framework and is there

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<v Speaker 1>any other avenue to get those tears down other than

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<v Speaker 1>basically diminishing European tech regulation.

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<v Speaker 2>I think that our regulation is adopted democratically by US

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<v Speaker 2>through very thorough legislative process, and therefore we are of

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<v Speaker 2>course going to protect our text sovereignity. What I heard

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<v Speaker 2>from Secretary Latin and Amasatagreer was that they wanted to

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<v Speaker 2>be treated fairly. So we had a lot of discussions.

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<v Speaker 2>Are we aiming only at the US Company's clear answer

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<v Speaker 2>is no, Just just look at the companies which we

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<v Speaker 2>are investigating or eventually funny and are we kind of,

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<v Speaker 2>you know, favoring the European companies in this case. Again no,

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<v Speaker 2>and I was just providing my both counterparts with the

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<v Speaker 2>fact that a lot of of these investigations are actually

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<v Speaker 2>prompted by the complaints which are coming from American companies

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<v Speaker 2>which are also located here in the They want to

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<v Speaker 2>make sure that US companies have treated fairly in non

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<v Speaker 2>discriminatory manner. When we would use more I would say,

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<v Speaker 2>the possibility of the of the settlement than fines, and

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<v Speaker 2>all these things been also discussed with American partners, also

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<v Speaker 2>by my colleagues who are responsible for these sectors.

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<v Speaker 1>And speaking of sort of rare earth minerals is obviously

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<v Speaker 1>it has been thrust into this sort of the conversation

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<v Speaker 1>very in a very sort of obvious way. Now by

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<v Speaker 1>the China.

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<v Speaker 3>Are we getting closer?

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<v Speaker 1>Is Europe getting closer to getting a general license from

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<v Speaker 1>China as the United States has?

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<v Speaker 2>Yes, I think that there I can say that we

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<v Speaker 2>are in a very close contacts with Foreign Trade Minister

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<v Speaker 2>Mankmental and also his team, so we are communicating on

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<v Speaker 2>different levels. We had here the team from China specializing

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<v Speaker 2>on export controls like a couple of weeks ago, and

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<v Speaker 2>I think we are getting initial reports from our industry

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<v Speaker 2>that they are getting these general licenses, but we need

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<v Speaker 2>to have a little bit more granual information.

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<v Speaker 3>To evaluid the whole process.

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<v Speaker 2>But the fact that this idea was favorably received, that

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<v Speaker 2>it seems that we are getting first general licenses, and

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<v Speaker 2>also that the Chinese side was receptive to our arguments

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<v Speaker 2>that the processes it was set up in April required

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<v Speaker 2>too much of a it's a very intrusive information, too

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<v Speaker 2>many photographs, too much detail about the supply chains, and

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<v Speaker 2>and I think that the general licensing could be could

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<v Speaker 2>be one of the solutions out to address this issue.

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<v Speaker 1>Does that mean that there's going to be a regime

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<v Speaker 1>that governs this sort of issue between the EU and

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<v Speaker 1>China or is it still just kind of being hopeful

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<v Speaker 1>that things don't change.

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<v Speaker 3>Basically, I think that we kind of.

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<v Speaker 2>Set up the kind of hotline with the Minister a

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<v Speaker 2>Bankmentao FOROL priority cases. So we are talking on our

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<v Speaker 2>level quite regularly, but especially our teams are in permanent contacts,

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<v Speaker 2>because indeed, we had the moments over the last year

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<v Speaker 2>where on my table I saw that pile of the

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<v Speaker 2>of the of the of the letters from the warried

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<v Speaker 2>CEOs of different new companies about the lack of permanent

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<v Speaker 2>magnets like of legacy chips and so on and so

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<v Speaker 2>forth was really growing quite rapidly and we needed to

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<v Speaker 2>address it. So now I think that we set up

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<v Speaker 2>the good channels on working level and political level to

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<v Speaker 2>address this issue.

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<v Speaker 3>But it's a challenge.

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<v Speaker 2>It brings additional instability into how the global supply chain

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<v Speaker 2>has been working, and therefore my message to the European

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<v Speaker 2>industry is you have to be prepared to pay security premium.

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<v Speaker 3>We have to.

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<v Speaker 2>Stockpile, we have to diversify, because we learned the hard

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<v Speaker 2>way how the dependencies are costly, and therefore we included

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<v Speaker 2>it into this new look, new communication on economic security

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<v Speaker 2>because weach simply have to be much better in managing

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<v Speaker 2>these emergencies.

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<v Speaker 1>And one of the costs of imbalance and the sort

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<v Speaker 1>of dependencies has been sort of evident in the trade

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<v Speaker 1>balance with China and something that Emmanuel and Macron has

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<v Speaker 1>been very critical of, particularly in the last week or

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<v Speaker 1>so after his visit to Beijing, saying that there should

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<v Speaker 1>be a more aggressive approach to dealing with the oversupply

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<v Speaker 1>that is going into Europe. Do you think there is

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<v Speaker 1>appetite to deal more aggressively with this question from China,

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<v Speaker 1>And do you think that the trade deforicit with China

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<v Speaker 1>specifically should be targeted by the EU and that is

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<v Speaker 1>something that they should be looking to close.

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<v Speaker 2>Clearly, I would say the deficit of three hundred billion

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<v Speaker 2>is way too high. This was the topic which was

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<v Speaker 2>raised by me with my counterparts from the moment one

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<v Speaker 2>when I first time came for the visit to China.

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<v Speaker 2>And I think that there's also very clear message from

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<v Speaker 2>our side that we'll fight tooth and nail for our

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<v Speaker 2>European jobs and European European companies and to have the

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<v Speaker 2>deficit of three hundred billion on permanent basis unsustainable. So

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<v Speaker 2>we are looking at different possibilities how to address this issue.

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<v Speaker 2>Maybe one interesting information for you would be that we

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<v Speaker 2>set up such as import surveillance taskcores which are monitoring

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<v Speaker 2>I would say, the inflows of the goods on bibyicle basis,

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<v Speaker 2>and this is what constitutes I would say, the basis

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<v Speaker 2>for our next steps.

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<v Speaker 1>And if three hundred and fifty billion is too high

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<v Speaker 1>for you, is a more reasonable figure? What is the

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<v Speaker 1>kind of goal? So we can think talk concretely about

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<v Speaker 1>kind of what we should be aiming for, and is

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<v Speaker 1>the anti coursion device, for example, something that is on

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<v Speaker 1>the table and trying to achieve that goal.

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<v Speaker 2>I think that before we went to I would say

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<v Speaker 2>the most I would say to the strongest, strongest instrument

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<v Speaker 2>in our arsenal. What would be very important for us

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<v Speaker 2>would be to see the tendencies. Are the European companies

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<v Speaker 2>in China treated fairly?

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<v Speaker 3>Do we have access, you know, to.

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<v Speaker 2>Some of the programs and public procurement, how the issue

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<v Speaker 2>of the handling of overcapacity is happening and the investments

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<v Speaker 2>are done in you are the real investment? Are we

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<v Speaker 2>talking about the I p R transfer? Are we talking

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<v Speaker 2>about creating real valuated in Europe? Are we talking about

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<v Speaker 2>creation of the of the real job? So what would

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<v Speaker 2>be very important is the tendency and I would say

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<v Speaker 2>engagement with us to address this The issues which you

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<v Speaker 2>are raising without Chinese counterparts really already for quite some.

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<v Speaker 1>Time, and it seemed going into sort of at the

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<v Speaker 1>end of last week or in the middle of last week,

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<v Speaker 1>that Mercosore was more or less a done deal. There

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<v Speaker 1>now appears to be some question about that. What do

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<v Speaker 1>you think are the chances that Mercosore goes into the

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<v Speaker 1>fact that it is signed this weekend.

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<v Speaker 2>They're going to use every every every minute of this

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<v Speaker 2>week to get it done, because I think to end

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<v Speaker 2>this turbulent year from the perspective of the such a

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<v Speaker 2>global trader like European Union with the biggest free trade

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<v Speaker 2>agreement ever signed, I think would be a positive conclusion

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<v Speaker 2>to this year. That's a big deal with lots of

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<v Speaker 2>opportunities for not only European exporters but also in the

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<v Speaker 2>field of critical row minimals, accessibility, and I'm sure that

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<v Speaker 2>in the end it would be very positive deal also

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<v Speaker 2>for our ugly food industry, which is paying very high

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<v Speaker 2>tiives if they tried to export anything to Americos. So

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<v Speaker 2>we really very diligently listen to our farmer's community, and

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<v Speaker 2>I believe that we found the responses to every single

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<v Speaker 2>concern they had.

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<v Speaker 3>I just hope that they will look at it carefully.

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<v Speaker 3>We are ready to explain it.

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<v Speaker 2>We are discussing it with our member states in the Parliament,

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<v Speaker 2>and I hope that we'll end up on the positive note.

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<v Speaker 1>And just very quickly after twenty five years of negotiation,

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<v Speaker 1>which is how long this has sort of been going place.

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<v Speaker 1>If we do not get it over the line in

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<v Speaker 1>this next couple of weeks, can we consider this sort

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<v Speaker 1>of initiative to be dead.

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<v Speaker 2>Let's think positive, and I would never accept such a

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<v Speaker 2>good deal like we negotiate it between Mercosur and European Union.

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<v Speaker 2>Is dead because it's just simply too good for our

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<v Speaker 2>citizens and too good for our businesses.