World Bulletin/News Desk
France called on the European Commission on Friday to monitor imports of South Korean-made cars, taking the first step towards triggering a safeguard clause in a free-trade deal that could lead to duties being reimposed.
Since the trade pact came into force in July 2011, France has seen imports of South Korean cars surge while its own carmakers have lost domestic market share to the likes of Hyundai and affiliate Kia, leaving them saddled with massive overcapacity.
France's biggest carmaker, PSA Peugeot Citroen announced plans to close a plant near Paris and cut 8,000 jobs, leaving outspoken Industry Minister Arnaud Montebourg battling to limit the damage and avoid further closures.
Montebourg, who has in the past openly supported protectionism, said last week that imports of small diesel cars had risen 1,000 percent in a year, which he said warranted monitoring and possibly restrictions.
"The surveillance of vehicle trade flows aims to shed light on the extent of bilateral imbalances," the industry ministry said in a statement.
"It makes importers have to obtain a permit from the European Commission before all imports," he added. That allows the European Union's executive arm to determine if imports are indeed strong enough to trigger the safeguard clause.
One of the most ambitious trade pacts the EU has negotiated, the agreement with South Korea includes a safeguard clause which allows the EU to re-impose duties if producers in sensitive industries such as cars are hit by a particularly strong surge in imports.
The pact has long been a major source of concern for European carmakers, with the ACEA industry lobby sounding the alarm about "asymmetrical trade flow relations".
EU Trade Commissioner Karel De Gucht says trade with South Korea benefits Europe overall, pointing to data showing EU exports to the country climbing 16 percent in 2011 from 2010 to 32.4 billion euros ($39.40 billion). That compares to 24.7 billion euros in 2007.
Volatility eased as traders focused on the world economy and corporate earnings after a week dominated by the dramatic spike in tensions over North Korea, which triggered a global sell-off before prices bounced back Monday.
Investors greeted the more conciliatory tone after US stocks dropped three days in a row last week on President Donald Trump's vow of "fire and fury" if North Korea continued to pursue its nuclear weapons and ballistic missile programs.
The ultra-conservative kingdom has moved to diversify its traditionally oil-dependent economy following a sharp fall in crude prices.
In its monthly report on the global oil market, the International Energy Agency said, however, that it believes the supply glut is easing, partly because demand is growing faster.
US stocks have been in retreat since President Donald Trump Tuesday issued a fiery warning to North Korea to halt its nuclear program.
The move by one of Japan's best-known firms greatly reduces the chance of an embarrassing delisting from the Tokyo Stock Exchange (TSE).
London's benchmark FTSE 100 index weakened by 0.5 percent to 7,503.39 points.
The approval by the European Commission comes just over two months after the European Central Bank -- which took on the role of the eurozone's banking supervisor in 2014 -- allowed the sale to go ahead for a symbolic fee of one euro.
BP, Chevron, ExxonMobil, Shell and Total have all published results in recent days, showing they pocketed $23 billion in net profit in the first half fo the year.
Higher cereal, sugar and dairy prices pushed food price index by 10.2 percent annually in July
HSBC was also a big riser, gaining three percent at £7.65 ($10, 8.5 euros) in late morning trade after the British banking giant announced a share buyback plan alongside a rise in first-half profits.
Both main crude contracts made strong gains, with WTI testing $50 a barrel for the first time since late May and Brent heading towards $53, while mining giants BHP Billiton and Rio Tinto saw their share price rise as commodities strengthened.