France’s import ban of some Mercedes cars points to a deeper conflict
By I.C.
FRANCE has banned imports of some Mercedes cars, claiming they fail to meet European technical standards for emissions of global-warming gases. It looks like an arcane technical dispute, but it is an early skirmish in what could become a trade war within Europe’s single market. The casus belli is ever-tighter European Union (EU) rules on car emissions of carbon dioxide. They threaten to hurt Germany’s huge car industry severely because it makes more money out of larger luxury cars with higher emissions than France’s and Italy’s carmakers, which sell mostly smaller, less polluting vehicles.
Some 4,000 cars due for delivery to Mercedes’s French distributors have been held up because France objects to the fluid used in their air conditioners. Mercedes declined to switch to the latest ingredient laid down by EU rules because it sees a fire risk with it; Germany’s agency for technical standards for cars agreed to extend use of the original fluid. Normally, under the rules in the European single market, approval by one nation’s body would be recognised across the EU. After complaints by Mercedes, French courts have given government two weeks to re-consider its ban, meaning to find a compromise to stop the dispute from escalating.
But escalation is likely because France is not happy about German efforts to stall tighter rules on exhaust emissions for new cars from 2020. European directives have brought average levels down by about a fifth in the decade to 2012, to 132 grams (4.7 ounces) per kilometre for a fleet average. But German cars tend average around 147 grams, dragged up by the big models of Mercedes, BMW and Audi (which generates most of Volkswagen’s profits). A further reduction to 95 grams per kilometre was due to have been sealed in June after clearing the European Commission and European Parliament. But after heavy lobbying led by BMW, Angela Merkel, the German chancellor, put heavy pressure on the Irish president of the council of ministers to postpone the usual rubber-stamping approval of the tighter limit.
Other European governments are reluctant to force the issue now for fear of embarrassing Mrs Merkel ahead of the German elections in September. So everything has gone quiet for the moment. But the nitpicking blockade of Mercedes imports by France is being widely read as a reminder to Germany that it should not count on bulldozing away directives and decisions that have gone through due EU process. Germany can count on support from Hungary, Slovakia and the Czech Republic—where many smaller German cars are assembled. The accession of Croatia last month may help Germany build a blocking majority in the council of ministers.
German carmakers know they will have to yield to tighter CO2 regulations. The reason BMW brought out its superlight electric car last month was to bring down its corporate fleet emissions so as to meet tougher rules in Europe and to keep the right to sell more polluting models in lucrative markets such as California. That said, the firm hopes it will, thanks to lower manufacturing costs and its premium price, make a profit from the outset—unlike GM and Renault/Nissan with their electric cars.
