EU eyes December trade initiatives after China car import deal

EU Set to Propose New Trade Measures After Agreement on Chinese Hybrid Car Imports

EU's Response to Chinese Hybrid Car Imports and Trade Deficit

BRUSSELS, Oct 12 (Reuters) - The European Commission is set to lay out potential trade defence measures in December designed to rein in its trade deficit with China and reduce its reliance on the world's second-largest economy for critical supplies.

Agreement Details and Import Limits

The EU executive Commission secured agreement with Beijing on Friday to limit imports of hybrid cars from China to 350,000 vehicles a year, most likely from early December, with a 6% annual increase. 

Duration and Impact of the Safeguard

The safeguard, which will also apply to other EU trading partners, will last four years, cutting Chinese hybrid exports to the EU that are on course to reach 800,000 this year and reducing the market share of Chinese-built vehicles to around 6%, from 12% now.

Upcoming EU Summit and Further Actions

EU leaders will discuss China as the first point of their summit starting on Thursday. Commission officials, providing details of the deal with China, said the leaders were likely to make an assessment of the agreement and determine if further action was required. 

Commission's Perspective on Dialogue

"Dialogue needs to deliver and it has delivered results," a senior Commission official said on Monday. "But dialogue alone looks unlikely to deal with this structural problem of unsustainable imbalances that we have with China."

Consideration of Additional Measures

"That is why the question will be what more do we do in parallel to the dialogue," the official added.

Planned Trade Defence Measures

The Commission plans in December to propose an instrument to limit companies' reliance on a single source for certain critical supplies, the official said.

Support Initiatives for Affected Industries

Another new initiative would seek to offer support to industries or specific regions within the EU that were hit by trade measures imposed from outside.

End-of-Year Summit and Next Steps

Leaders will then discuss these and other potential measures at their end-of-year summit on December 17-18.

(Reporting by Philip Blenkinsop, editing by Inti Landauro and Alex Richardson)