Morocco as a Chinese Industrial Base?
In March the European Council on Foreign Relations published a report I co-authored with Camille Lons and Byford Tsang, “EV endgame: Stalling China’s export surge in Europe’s southern neighbourhood”. As with everything that happened in March, I think this got overwhelmed by the war, and I hadn’t given it much thought since its release. Here’s the summary for the report:
China is investing in electric vehicles in the Middle East and North Africa, allowing it to capture shares in emerging markets and potentially bypass Western tariffs.
This challenges Europe’s competitiveness and increases its dependencies in the supply chains that underpin the green transition. It could also contribute to the erosion of Europe’s geoeconomic influence in its southern neighbourhood.
The EU and member states need to prevent tariff circumvention and shore up their car manufacturers. But they will have to align their trade and industrial policies with the goals of the EU’s new neighbourhood policy, the Pact for the Mediterranean.
This means Europeans must work with partners in the region as part of a broader electric vehicle and clean-tech ecosystem, and not let it become another Sino-European battleground
I started thinking about this when I noticed two seemingly unrelated sets of stories, one about BYD investing significantly into Turkey, and another about an unusual number of Chinese investments in Morocco, primarily in EV components and batteries. Since the EU had tariffs on Chinese EVs and both Morocco and Turkey have access to the EU market through association agreements, this looked like a potential way for Chinese automakers to circumnavigate EU tariffs.
