00:00As an October deadline looms for the European Union to rebalance its record trade deficit with
00:05China, pressure is mounting on Brussels to deliver results. Our Chief Europe Editor,
00:11Maria Tadeo, sat down exclusively with the man driving the negotiations. That's, of course,
00:15the EU Trade Commissioner, Mara Sefcovic, and she joins me now for more. Maria, we know that
00:20a team of European officials are actually in Beijing as we speak. What are they hoping to
00:24achieve? Well, yes, Maeve, they are in China and have been, but as I understand, they will come
00:28back today. And of course, that will allow for a debrief on the big European question
00:33going into September, and that is what to do with China. We've seen that one billion euro a day
00:38deficit, 350 or 60 last year. This is now for Brussels, not sustainable over time. There will
00:45need to be or they need a rebalancing by October. And that is exactly the question that I put to
00:52the
00:52man who's going to be at the driving seats in this very difficult talks. Of course, we have practically
00:57five to six weeks left. If there is no understanding, that could lead to retaliation
01:03from the European Union. And as I understand right now, there are two tracks to these stocks.
01:08One is getting China to open up its market. But then the other point is very much about how to
01:13tackle the surging deficit and this barrage of exports going into the European Union. The very
01:19heart of the European industry is at stake. And I was very struck by the words of Mara Sefcovic,
01:24who told me, this is not just a trade story. It is super political. But the question remains,
01:29how do you get China to change? And that's exactly the question that I put to him. Let's take a
01:34look.
01:35I think first and foremost, we want to convey clearly the message. And we made some very concrete
01:42proposals how to proceed to that the issue of the deficit, which is in the realm of 360 billion,
01:49is best tackled if you work on it from the both sides. So what can we do to increase our
01:56exports
01:57to China, but also how we can better manage the exports from China to the European Union. So this
02:03is what we are currently discussing. Of course, it's an issue which would require clearly more time than
02:10until October. But what I think it's very important for us to have by October some kind of proof of
02:16concept.
02:17But when you say in October, what is that? Is that a firm deadline? Is that a cliffhatch moment?
02:22Is that the start of negotiations with something binding on paper? How do you know you have a deal?
02:28Will you be able to produce that by October?
02:29I think that in my ideal scenario to come back from China with the positive news that we have
02:35understanding how to deal with the surging deficit in certain categories of the products. This is how
02:40we are going to deal with them. And therefore, I would propose to continue, you know, the negotiations
02:48on other sectors, which would kind of bring us into the realistic path of how to rein in the surging
02:55deficit.
02:56So how are you going to make them do that? Because this conversation has been going on for months and
03:00some would say for years. Action should have been taken five, ten years ago. How are you going to break
03:04this cycle?
03:05I think that, as I said, we have now unprecedented intensity of our negotiations. I think we never
03:11talked to our Chinese counterparts as frequently, as intensely as right now. And I clearly understood
03:17also from my Chinese counterpart, Minister Van Guantel, that this is also the preferred option
03:22to talk to the negotiator.
03:24They do not want an escalation. They have told you they do not want an escalation.
03:26Exactly. This is what we heard from them.
03:28But that's a great deal for them. They continue dumping and there's no escalation.
03:30But, of course, I told them that, look, if I will not bring tangible results by October,
03:35and this is something what was agreed mutually by Minister Van Guantel and myself, because
03:40he understands if I kind of come back and tell them that we have a nice talk and we continue
03:45talking, of course, this would be not something to the satisfaction of the European leaders
03:50and European also, you know, captains of the industry. Because I told our Chinese counterparts
03:56that our discussion goes well beyond the trade, because now we're talking about future European
04:01industry, you know, how the European economy will look like in the future.
04:05And I would say, in the end, about the European social model. So this is super political.
04:11And, of course, every single prime minister, every single president of the European Union
04:16is very much concerned by this. And therefore, we have to bring the good political solution.
04:22And was there an understanding from the Chinese that this time you will have the instruments
04:28and you will have the political unity? Because this has not been the case. And that's partly
04:32the reason why, to me, it seems until now, China does not fear retaliation. They do not think you
04:37will do it.
04:38I think that at least my impression was that the fact that this is really an urgent call,
04:46that this is not, I would say, the situation like we had, I mean, before with half of the
04:51member states doing well, half of the half of them suffering, that it's really, I would say,
04:56unified European approach that this has to change, that we have to address this issue. And then I'm
05:01trying to do it through, I would say, the negotiations, but they have to bring us very concrete results,
05:08otherwise, of course, there will be a strong political movement to push for, I would say,
05:15harsher, harsher measures.
05:16Yes. And let's go into the final point, which is the Canadians. Canada is now in an unprecedented
05:22trade war with the United States. Tariffs through the roof both ways. And just very quickly,
05:28given the situation that they're in, this is going to hurt the Canadian economy. There's no doubt about
05:31that. The tariffs now are going through the roof and there's no idea or limit to the escalation.
05:37Do you feel the EU should intervene, try to mediate? You talk about a good relationship,
05:44they are going to feel the pain. I don't think that we are in a position to mediate. But at
05:51the same
05:52time, I know that they have such a close economic relationship that despite of current tension,
05:59then sooner or later, there will be attempts to resolve it. Of course, I'm not in the file, but I
06:04know
06:05that this is very important for both partners. But we clearly are highlighting one thing for us. The
06:13tariffs are taxes. Taxes are paid in the end or by the economic operators or by the citizens. And we
06:22clearly are
06:22stating in all our trade negotiations, we clearly support free and fair trade with lower or no tariff
06:30at all, because we believe it's best for the citizens, best for the business and best for economic
06:34developments.
