Hungary will push to “de-escalate” trade tensions between the EU and China during its Council presidency, Budapest’s Ambassador to the EU Bálint Ódor told Euractiv, as the country’s Prime Minister Viktor Orbán visited President Xi Jinping in Beijing on Monday (8 July).
The ambassador’s comments and Orbán’s surprise trip to China come after provisional EU tariffs on China-made electric vehicles kicked in on Friday 5 July.
“As the EU, we must do our utmost to de-escalate current tensions with our main trading partners,” said Ódor, whose country took up the six-month rotating presidency of the Council of the EU at the beginning of July.
Earlier in the day Orbán pledged to use the country’s EU presidency “as an opportunity to actively promote the sound development of EU-China relations,” according to Chinese state media.
The European Commission, however, was quick to reiterate that Orbán’s visit to Bejing—which he presented as the third leg of his “peace mission” to end the Ukraine war, following similarly unannounced visits to Kyiv and Moscow last week—was not conducted on behalf of the EU.
“[Hungary] has specific responsibilities […] when it comes to managing the work of the Council, and that is completely distinct from what a member state does with its own foreign policy,” Commission lead spokesperson Eric Mamer told journalists in Brussels on Monday.
“What is clear… and I think it has been acknowledged by Prime Minister Orbán himself, is that he has no mandate on these visits to represent the EU,” he added.
Spearheading open trade?
Ódor stressed that Hungary, whose economy is deeply integrated with the German automobile industry and Chinese battery manufacturers, “exemplifies successful cooperation” between the two blocs.
“We should seek to maintain and strengthen cooperation with as many countries and market players around the world as possible,” he added.
Hungary is a major destination of Chinese foreign direct investment. Electric vehicle manufacturer BYD and battery manufacturer CATL have both announced plans to build multibillion-euro plants in the country; China is also Hungary’s largest trading partner outside the EU.
In an op-ed last week, Orbán hailed Hungary’s “diversified” trade and investment relationships and said Budapest would focus “on co-operation with industrial partners in the Asia-Pacific region in key sectors of technology and innovation.”
The Hungarian Prime Minister warned against pursuing a “trade war” with China that “the main players in the European economy” were not asking for.
Orbán’s visit to China followed a trip by Xi to Hungary in May, during which the two leaders agreed to upgrade their relationship to an “all-weather comprehensive strategic partnership.”
Competitiveness priorities
Ódor also emphasised the “essential” role that trade relations play in boosting the bloc’s faltering competitiveness—another top priority of the Hungarian presidency.
“Trade and economic relationships with third countries are essential elements of the [EU’s] competitiveness,” he said.
“Improving competitiveness is an overarching priority for Hungary, which should be integrated into all European policies in a holistic manner,” he added.
Other important ways of boosting the bloc’s competitiveness include “eliminating bureaucratic red tape,” integrating the bloc’s single market for capital, and reforming the EU’s intellectual property system, according to Ódor.
He noted that the bloc’s new Strategic Agenda, the recently published report on the single market by former Italian Prime Minister Enrico Letta, and the forthcoming report on competitiveness by former European Central Bank President Mario Draghi “will all need to be taken into account” in formulating the competitiveness deal.
Asked about Draghi’s suggestion last month that boosting the bloc’s competitiveness will also involve “facilitating the entry of highly skilled workers from outside the European Union”, Ódor, whose country has repeatedly stressed the importance of addressing illegal migration into the EU, said: “Europe faces an ageing population, strained social welfare systems, and labour shortages that threaten competitiveness.”
“Therefore, the Hungarian Presidency aims to hold discussions on the different aspects of the demographic challenges, while bearing in mind, that it is the competence of member states, how to address their labour market needs. There are different ways to address these challenges, we should explore all options.”
As reported by Euractiv in June, however, when laying out the priorities for the next six months, Hungarian officials placed significant emphasis on “the mobilisation of internal labour reserves”—including women, career starters and older workers—to boost the bloc’s economy. They however avoided focusing on the European Commission’s and economists’ emphasis on the potential impact of labour migration.
[Edited by Anna Brunetti/Rajnish Singh]