{"text":[[{"start":8.56,"text":"France and Germany are willing to include the UK car sector in the EU’s “Made in Europe” public procurement scheme — a longstanding request by the British government — but only if London aligns its China tariffs with the bloc, according to a draft of the agreement seen by the FT."}],[{"start":23.84,"text":"The deal would specify that “Made in Europe” rules designed to limit access to subsidies and public contracts to European companies would cover car manufacturers in the 27 EU member countries and the UK, by including “other European partners that were part of the EU internal market on January 1 2020”."}],[{"start":41.884,"text":"However, the UK would have to align with “EU trade protection measures” such as tariffs on Chinese electric vehicles to benefit from the status, which would be difficult for the British government to accept."}],[{"start":54.063,"text":"Other trade partners who had been demanding inclusion of their carmakers, such as Japan, South Korea and Turkey, would not be included."}],[{"start":62.04,"text":"The deal, which is not yet finalised, would also meet a German demand to relax the phaseout of combustion engine sales in the EU by 2035 and contains a number of other proposals that would weaken the bloc’s climate ambition."}],[{"start":74.16,"text":"France and Germany have been in negotiations over car policies since the summer. The measures are designed to set rules on the phaseout of combustion engines, as well as introducing new European preference rules for cars and car parts, including batteries."}],[{"start":88.4,"text":"The UK has so far resisted imposing similarly strict measures on Chinese imports as the EU and has seen a much larger share of Chinese vehicles in its car mix. London would also have to place stricter conditions on foreign direct investment in the UK."}],[{"start":103.79,"text":"The strict EU27 vision had been pushed by France as a means to revive Europe’s struggling car industry but Germany had sought to include the UK and other trade partners in the deal."}],[{"start":114.48,"text":"The compromise proposal puts the UK in a bind given that it delivers the market access UK Prime Minister Andy Burnham has been requesting, but at the price of aligning with EU trade measures."}],[{"start":123.36,"text":"The UK currently has only a standard 10 per cent import duty on Chinese electric cars. By contrast, the EU has since 2024 imposed its maximum 45 per cent levy while the US has a 100 per cent tariff."}],[{"start":137.44,"text":"Business secretary Jonathan Reynolds has placed the idea of higher UK tariffs on Chinese electric vehicles “under review”, but he is cautious about measures that could prompt reciprocal tariffs on British carmakers who export to China, particularly Jaguar Land Rover."}],[{"start":155.12,"text":"A UK government official said: “This is a Franco-German proposal and there is still a European process to run, but if confirmed, we welcome the objective to have UK included” in Made in Europe, adding that “this would be good news for the British automotive industry and the jobs and investment it supports across the UK”."}],[{"start":175.36,"text":"The UK and the EU’s car industry have argued that excluding Britain from the Made in Europe scheme would be damaging for both sides, due to highly integrated supply chains."}],[{"start":183.204,"text":"UK carmakers stand to benefit from inclusion in the scheme as they face pressure from Chinese competition as well as higher US tariffs, which have led to large cuts."}],[{"start":193.012,"text":"But the industry remains cautious about the UK tariffs on Chinese EVs and potential retaliation from Beijing, with the government also keen to attract investment from Chinese carmakers into factories in Britain."}],[{"start":205.892,"text":"In a boon for Germany’s car industry, the draft deal also further waters down requirements for carmakers to reduce their emissions."}],[{"start":213.642,"text":"The European Commission has proposed a 2035 target to reduce CO₂ emissions from cars by 90 per cent of 2021 levels, rather than the previously agreed 100 per cent. It would compensate the remaining 10 per cent through the use of EU-made low-carbon steel or sustainable fuels."}],[{"start":232.13,"text":"The proposal would instead remove this “compensation”, meaning that manufacturers would not have to “offset” these emissions, the document states."}],[{"start":239.312,"text":"Other policies in the deal include less strict emissions rules for plug-in hybrid vehicles and a more favourable regime for renewable fuels, as well as making requirements to electrify corporate fleets more flexible, all of which were demanded by Germany and the car industry."}],[{"start":254.595,"text":"Several people familiar with discussions said an agreement was close but that negotiations are still ongoing and that the agreement could be subject to change, particularly with regard to rules on 2030 CO₂ emissions. It comes after French President Emmanuel Macron on Monday said a deal was “imminent”."}],[{"start":273.04,"text":"Any deal would be subject to agreement with other EU member states and the European parliament before becoming law."}],[{"start":279.128,"text":"The Élysée did not immediately respond to a request for comment. A German government official said “negotiations haven’t been concluded yet”."}],[{"start":288.08,"text":"Additional reporting by Jim Pickard and Kana Inagaki in London"}],[{"start":294.24,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792120613_2358.mp3"}