The EU is lobbying China to keep agriculture out of a series of trade disputes, calling for the “strategic sector” to be protected from trade tensions in the renewable energy and electric vehicle industries.
Over the past year, the bloc has launched several investigations into Chinese suppliers it says have violated a new regulation on foreign subsidies that gives Brussels the power to “tackle distortions” that benefit third-country companies operating in the EU, the Financial Times (FT) reported.
My aim is to do everything possible to avoid agriculture falling victim to problems in other sectors,” EU farm commissioner Janusz Wojciechowski said in an interview during a visit to Beijing late last month.
Wojciechowski added that he had told his Chinese counterparts that “we need to treat agriculture as a sector that needs special protection … as a strategic sector, strategic for security”.
The EU is China’s second largest trading partner, but tensions have risen over Brussels’ accusations that Beijing is “fuelling industrial overcapacity to boost economic growth” and raising fears of dumping on European markets.
Brussels also objects to China’s growing trade surplus. The trade surplus of €291 billion in 2023 is down from a record of almost €400 billion a year earlier, but well above levels of the previous decade.
On the other hand, Wojciechowski also pointed out that agricultural products are an area where the EU has a surplus. EU agri-food exports to China totalled €14.6 billion, down almost 8% from 2022, while imports from China to the EU fell by 15% to €8.3 billion.
In recent months, the EU has launched several ‘anti-subsidy’ investigations targeting Chinese companies in the clean energy and infrastructure sectors. In September, European Commission President Ursula von der Leyen announced the launch of an investigation into Chinese electric vehicles, which could lead to the imposition of tariffs.
Following the announcement of the electric vehicle probe, China launched an investigation into cognac, one of France’s top exports. Beijing has denied that these actions are linked, but agricultural producers are concerned that EU pressure on Chinese subsidised products could lead to Beijing retaliating against EU food exports.
“Our agri-food exports to China are important and it is problematic that our sector is paying the price for disputes with other sectors,” said a spokesman for EU farm lobby group Copa Cogeca.
However, there are some signs that China is taking a softer approach to the EU agri-food sector. In January, Beijing lifted a five-year ban on Belgian pork products, initially imposed because of swine flu.
Wojciechowski said Chinese officials gave no signals during his trip that they would “punish” agricultural trade. Chinese President Xi Jinping has said in the past that food supplies are vital to national security.
But the volume of EU agri-food exports to China is well below 2020-2022 levels, partly due to reduced shipments of pork and dairy products hit by high energy costs.
