German Chancellor Friedrich Merz said he was "surprised" by the intensity of the pushback from East Asian countries against planned "Made in Europe" rules for the bloc's car sector. Asian countries strongly protested a plan agreed by Merz and French President Emmanuel Macron, under which Brussels would restrict car subsidies to vehicles produced inside the EU, Switzerland and the U.K. South Korean President Lee Jae Myung told reporters that he had “asked Merz for support so that Korea would be treated like the EU member states.” A similar complaint was voiced in Japan.
Merz admitted the Franco-German proposal had “sparked considerable concern in the region — in Singapore, Japan, and Korea — that we may be facing a new wave of protectionism in Europe, that we are closing ourselves off from other countries.” The chancellor vowed to take those complaints “very seriously” and to raise them at the next EU leaders' summit. The bloc's leaders are set to meet in Dublin on Nov. 13 for an informal gathering. Merz proposed a “global political alliance for rules-based trade” between so-called middle powers in speeches in Seoul and Tokyo.
The EU, Asian nations, Canada, Australia, New Zealand and the South American Mercosur trade bloc should “coordinate” and “act together” if others challenged the international rules “or if economic pressure were to be exerted" — a thinly veiled reference to Chinese threats to restrict access to rare earth metals or the tariff threats from U.S. But the pushback from South Korea and Japan are a sharp reminder of how industry-specific frictions can hamper the implementation of the larger alliance proposed by Merz.
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