The EU is drafting new rules to promote supply chain diversification and reduce reliance on China

The European Commission is exploring new regulations that would require companies in sensitive sectors to reduce over-dependence on a single supplier, particularly within critical supply chains involving China, while also establishing diversified procurement systems.

On Friday, June 5th, European Trade Commissioner Maros Sefcovic said at a think tank conference hosted by the European Policy Centre in Brussels that this proposal will be included in the EU’s comprehensive review of its trade defense mechanisms, expected to be completed in the third quarter of this year.

The proposed reforms also include accelerating anti-dumping and anti-subsidy investigation procedures, as well as studying new measures to address overcapacity issues.

Sefcovic stated: "Supply chain diversification will require dedicated policy tools." He added that while urgency is most evident in the critical minerals sector, all high-risk industries should gradually move away from dependence on a single supplier.

According to current discussions within the European Commission, companies that can ensure at least three different sources for key materials would help mitigate risks from global supply disruptions and changes in government policies—such as China’s previous export restrictions on certain rare earth products.

However, Sefcovic did not specify which industries would be classified as high-risk or name any particular suppliers potentially affected.

He revealed that EU leaders will discuss economic security issues during their summit in Brussels on June 18–19, and may provide guidance on which policy tools the Commission should prioritize moving forward.

Last month, five EU member states jointly released a document calling for reform of existing trade defense measures to better respond to the impact of low-priced imported goods.

Sefcovic noted that the EU has already introduced some policies encouraging firms to seek diversification if their reliance on a single source for a critical supply reaches 40%. He said: "Whether we need to further strengthen these rules and make them more specific—that is exactly what the EU is currently researching."

In parallel, he emphasized that any new measures must be fully coordinated with industry stakeholders and include transition periods. He stated: "I understand that businesses are currently facing difficulties, and the economic environment is extremely challenging. But we must work together with companies to figure out how to incorporate such supply chain risk costs into business operations. Such considerations may not have been necessary in the past, but the situation has changed now."

Source: rfi

Original article: toutiao.com/article/1867221484369961/

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