EnTalks to deliver an Environmental Goods Agreement between the EU and 16 countries have failed, according to a statement by the European Commission and the U.S. Trade Representative. This is being blamed on an unwillingness by China to change its mind on the list of goods to be included, Reuters reports. The deal was an opportunity to reduce tariffs on products related to mitigating the environmental impact of energy, waste, water and pollution.
China’s exports of solar energy equipment – a central plank of the energy portion of the EGA – fell for seven straight months through October 31. They fell 40.7% in October, Panjiva data shows, excluding shipments to Hong Kong and reached their lowest level since September 2013. This partly reflects the effect of trade tariffs brought by the U.S., as discussed in Panjiva research of November 16.
Source: Panjiva
Interestingly, China also wanted to include a much broader range of products. These included bicycles on the basis they reduce the need for scooters and even cars especially in developing markets. This objective is not a surprise given Chinese exports of bicycles have dropped 13.6% in the three months to October 31 and by 12% averaged over 12 months vs. the same period a year earlier. They reached their lowest level since February 2014.
This probably reflects the falling popularity of cycling as a sport and bikes as a gift in developed economies, with the U.S., Japan and Australia representing 46.9% of shipments. China’s exports have also lagged in Asian emerging markets – the presumed target for environmental-type shipments – which fell 22.7% in the quarter to October 31.
Continued negotiations of a broad-brush EGA seem unlikely to include the United States. This would be because of the stated preference for bilateral, rather than multilateral, deals from Wilbur Ross – U.S. President-elect Trump’s proposal for Commerce Secretary.
Source: Panjiva
