BRUSSELS, Oct 3 (Reuters) - European Union members will
vote on Friday on a European Commission proposal to impose
tariffs on Chinese-made electric vehicles (EVs).
The Commission last revised the tariff rates in September,
imposing levels from 7.8% for Tesla to 35.3% for SAIC and other
producers deemed not to have cooperated with the EU's
anti-subsidy investigation. These would be come on top of the
EU's standard 10% car import duty.
EU VOTE
The proposed final or "definitive" duties will be subject to
a vote by the EU's 27 states. The Commission's proposal can be
implemented unless a qualified majority of 15 EU members,
representing 65% of the EU population vote against. It is a very
high hurdle.
Reuters reported on Wednesday that France, Greece, Italy and
Poland will vote in favour, which would be enough to push
through the EU's highest profile trade measures.
The Commission can still submit an amended proposal at a
later stage, which it might do to secure greater backing.
In any case, a decision on tariffs has to be made by Oct.
30, with their imposition the following day. Definitive tariffs
typically apply for five years.
If imposed, definitive tariffs would mean provisional duties
dating back to July would also have to be paid. Until the end of
the EU investigation, companies can cover these with a bank
guarantee.
CONTINUED TALKS WITH BEIJING
The European Commission has said it is willing to continue
negotiating an alternative to tariffs with China even after
tariffs are imposed.
The EU executive said last month it could re-examine a price
undertaking - involving minimum import prices and typically
volume caps - having previously rejected those Chinese companies
have offered.
One option under negotiation is a matrix of minimum import
prices calculated using criteria such as the range, battery
performance and length of the electric vehicle, along with
whether it is two- or four-wheel drive, a source familiar with
the matter said.
The Commission has said any alternative must be in line with
World Trade Organization (WTO) rules, adequate to remove the
injury due to subsidies and enforceable.
CHINESE RETALIATION
In moves seen as retaliation, China has launched
anti-dumping investigations into EU exports of pork and brandy
and an anti-subsidy probe into EU dairy products, but it has yet
to impose any measures.
The EU launched a challenge at the WTO last week into the
dairy probe.
China's Commerce Ministry has also met with automakers and
industry associations to discuss raising import duties on
large-engined gasoline vehicles, which would hit German
producers hardest.
Germany's exports of vehicles with engines of 2.5 litres or
larger to China were worth $1.2 billion last year, Chinese
customs data shows.
WHAT HAPPENS AFTER THE INVESTIGATION?
Any company not in the sample group of BYD,
Geely and SAIC that wishes to have its
own individual duty can ask for an "accelerated review" just
after the imposition of definitive measures. Such a review
should last a maximum of nine months.
The Commission can also carry out an "interim review" after
a year has elapsed if the measures are no longer necessary or if
they are not sufficient to counteract subsidies.
The Commission often looks into whether producers are
evading duties via exports of parts for assembly elsewhere. For
the EU, such circumvention exists if 60% or more of the value of
parts are imported from the country subject to duties and if the
value added in the assembly is no more than 25%.
Companies can dispute the measures at the European Court of
Justice. China has already launched a challenge at the WTO. Both
legal paths can take well over a year.
The Commission has said it is confident its investigation
and measures are compatible with WTO rules.