28th Sep 2022


US treasury boss to press EU on trade this WEEK

  • Washington: an EU-US trade deal could be worth €119 billion (Photo: prameya)

Trade and tax are likely to take centre stage when US treasury secretary Jacob Lew visits EU leaders this week.

Lew will meet with European Council and Commission heads Herman Van Rompuy and Jose Manuel Barroso in Brussels on Monday (7 April), before meeting European Central Bank chief Mario Draghi.

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Meetings with Germany's finance minister Wolfgang Schauble and French counterpart Pierre Moscovici top of the bill on Tuesday.

Having also visited Beijing, the 48-hour EU tour is Lew's second foreign trip since being confirmed by the US Senate in late February. Lew, who previously ran President Barack Obama's White House as chief of staff replaced Tim Geithner as Treasury secretary.

The eurozone crisis and, in particular, the clumsily-agreed Cypriot €10 billion bailout are expected to take centre stage in his meetings.

However, US opposition to the financial transactions tax proposed by 11 EU countries will also be on the agenda.

Although the US economy has outperformed Europe, growing by 2.2 percent in 2012 and is expected to expand by between 1.5 and 2 percent in 2013, US officials remain concerned that the eurozone's protracted recession is continuing to be a drag on its economy.

Meanwhile, with lawmakers in the US Congress still divided on how to resolve the country's "fiscal cliff," the US budget deficit is set to remain higher than the EU average at an estimated 5.3 percent in 2013 according to the Congressional Budget Office.

The two-day trip also comes after EU and US officials announced plans to begin negotiations on a comprehensive transatlantic trade agreement in February.

The communique agreed by EU leaders at the February summit said that "an ambitious trade agenda can lead in the medium term to an overall increase of 2 percent in growth and to the creation of 2 million jobs."

In March, EU trade commissioner Karel de Gucht revealed that the EU executive had agreed a mandate for talks. Both sides are keen to strike a deal by mid-2014 when the next round of Congressional mid-terms and the European elections will take place.

Research published by the commission drafted by the Centre for Economic Policy Research (CEPR), a London-based think tank, indicating that an EU-US trade deal could be worth up to €119 billion per year to the EU economy, translating into €545 per year for the average family of four.

At the same time, the European Parliament's international trade committee will also be in Washington this week to discuss the trade talks with their congressional counterparts.

Trade tariffs will be addressed on Wednesday with the EU commission expected to table revised legislation on its trade defence rules. The Trade Defence Instruments (TDIs) allow EU countries to respond to subsidies or dumping practices by other countries.

Eurozone finance ministers will meet in Dublin on Friday (12 April) for April's Eurogroup meeting.

The Cypriot bailout and bank recapitalization will lead discussions.

Ministers are also expected to discuss the state of the European economy in advance of the publication of the commission's Spring Forecast later this month.

France and Belgium are among the countries under most pressure to meet their deficit reduction targets set by the Commission.

On Wednesday, the Union marks the entry into force of the its anti-human trafficking directive.

Elsewhere, the Parliament's civil liberties committee will vote on legislation on visa requirements on Monday.

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