EU demands similar access to US as Canada and Mexico for electric cars and renewable products

European electric cars, batteries and renewable energy products must have the identical access to the US market as those from Canada and Mexico, EU officials said on Monday, because the bloc prepares to begin negotiations with Washington over its Inflation Reduction Act.

The US signed its $430 billion anti-inflation bill into law in August. It includes state aid to spice up US manufacturing and incentives for consumers to purchase American products including cars and renewable energies.

The EU believes that the bill risks unfairly discriminating against its own products and a joint EU-US Task Force to resolve the problem has been arrange. The primary meeting is scheduled for later this week.

“The result we’re expecting is a derogation for EU member states,” Czech trade minister Jozef Síkela told reporters in Prague on Monday following a gathering of EU trade ministers.

“In fact, ideally we would love to have the identical level of derogation as there’s for Canada and Mexico but we must be realistic. That is our start line within the negotiations,” he explained.

Valdis Dombrovskis, the EU Commissioner for Trade, added that “it could appear that most of the green subsidies provided for within the Act may discriminate against EU automotive, renewables, battery and energy-intensive industries.”

 “Hopefully we’re going to have constructive engagement from the US and we stay up for seeing this issue resolved on this latest forum. It probably won’t be easy to repair it but fix it we must”.

Asked specifically about whether the EU would consider retaliating if talks break down, Dombrovskis said that “at this stage, we’re specializing in negotiated solutions before considering what other options there could also be.”

He also said that he had discussions with other countries which have “similar concerns”, including Japan and South Korea, and that they too are “looking (at) find out how to best approach this issue.”

“But currently, we’ll give negotiations a likelihood before engaging in further considerations,” he reiterated.

French President Emmanuel Macron has as an example championed a “Buy European Act just like the Americans” to guard European manufacturers.

“You may have China that’s protecting its industry, the US that’s protecting its industry and Europe that’s an open house,” he told French television earlier this month. 

European manufacturers are being hit hard by energy prices, which have soared in recent months because of this of Russia’s illegal war against Ukraine and Moscow’s decision to stop delivering gas to the bloc in retaliation for wide-ranging sanctions. 

Inflation within the euro area is as an example expected to have jumped 10.7% year-on-year in October — the very best level ever recorded within the 19-country zone. 

It’s been fuelled by energy prices which have increased by greater than 41% since October 2021.


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