00:00I believe that it's always good to talk, to explain, and I'm happy they did it with this
00:10relatively calm tone, which contrasts with what we see in the media, who jump immediately
00:20in a trade war between EU and China.
00:27There is no such thing as a trade war between EU and China.
00:32There are trade frictions that have to be handled according to the WTO rules that govern
00:43trade frictions.
00:45The EU, on its side, believes that EU Chinese cars exported in Europe are sold at prices
00:58which are dumped by the impact of Chinese subsidization for car producers in China.
01:09And according to WTO rules, the EU has calculated a tariff that rebalances this impact of subsidies
01:21on the low price of Chinese EVs in Europe.
01:26If China is not pleased with that, and this is perfectly understandable, China will go
01:33to the WTO and initiate a dispute against the EU, probably arguing that the tariff of
01:44the EU is not in line with WTO rules.
01:47This will be litigated.
01:50On the other side, China believes that European cognac, in the occurrence French cognac,
01:59there is no production of cognac in the European Union anywhere in France, is sold at prices
02:08which are subsidized.
02:10Of course, of course, there is a strange coincidence between this Chinese new measure, which, if
02:21the EU believes it is unfounded, which it may be, then it will go to the WTO dispute
02:28settlement and try to argue that China does not have the necessary evidence that French
02:36cognac is subsidized and competes unfairly with Chinese domestic products.
02:44Sorry for being a bit long, but this is the reality.
02:48It's not a trade war.
02:50There are trade frictions.
02:52There have always been trade frictions.
02:54There will always be trade frictions.
02:56We have WTO and a dispute settlement system that works, not between the US, but between
03:03the EU and China.
03:05It's very good to explain that, because as you said, there are always these trade frictions.
03:11So how do these big leaders, how do they get over those frictions then?
03:16Is it this face-to-face talking?
03:22If in these two cases, if EU is unhappy and if China is unhappy, the solution is very
03:30simple.
03:31You go to the WTO judge who will adjudicate this case.
03:37That's the short-term answer.
03:38OK.
03:39If you look at the big picture, and we have to look at the big picture, and of course
03:45the picture is bigger for cars and EVs than it is for cognac or whatever strong alcohol,
03:54which is not a big economic thing.
03:57It matters, but it's not as big as cars.
04:00I think the car issue is a holistic issue that needs to be seen by both sides.
04:11The big question for China is, do we export to the EU or do we invest into the EU?
04:20And the big question for EU is, do we believe that an integration of value chains between
04:29China and Europe in electric vehicles is the way to go, or do we behave like the US,
04:37who believe that car production has to be decoupled between the US and China?
04:45And this is the big picture.
04:48And I hope, I hope that at the level of the highest authorities on both sides, they don't
04:54spend their time looking at the small picture.
04:58They have to look at the big picture.
05:00That's the big picture.
05:01The big picture is, there is a big future for electric vehicles, production, trade.
05:09It's good to fight against carbon emissions.
05:13How do EU and China together look at this big picture?
05:19How much of integration or how much of arm-length separation needs to take place in the future?
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