Friday

10th Jul 2020

EU seeks mini-trade detente with US

EU states have agreed to open trade talks with the US in a bid to rebuild relations with their oldest partner on the world stage.

They gave the European Commission the green light on Monday (15 April) to try to remove tariffs on "industrial goods", excluding cars and agricultural produce.

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  • Trump imposed tariffs on EU steel and aluminium exports, prompting EU retaliation on US motorbikes and denim, among other products. (Photo: European Commission)

They also agreed to try to harmonise product technical specifications to make trade flow more easily.

"It's in their [the Americans'] hands now, we're ready [to start talks] as soon as they are," trade commissioner Cecilia Malmstroem said.

"If we agree to start, I think it can go quite quickly," she added, when asked if the trade accord could be concluded by the end of the year, when the current commission's mandate ends.

The deal is to boost bilateral trade by €53bn by 2033, according to commission estimates.

It is also meant to make peace between the world's two biggest trade partners and old military allies after a turbulent few years under US president Donald Trump's presidency.

Trump started out by ditching EU-US talks on a free-trade treaty.

He later imposed tariffs on EU steel and aluminium exports, prompting EU retaliation on US motorbikes and denim, among other products.

He has threatened to impose tariffs on EU cars and car parts, while demanding that the EU opens up its agricultural markets.

He has also torn up an EU-brokered deal on climate change and one on Iran nuclear arms control and threatened to pull the US out of Nato in a wider split between the old allies.

The commission on Monday said the EU was already buying more US soy beans and liquid natural gas than ever, in a bid to mollify Washington.

But it ruled out opening up its food markets.

"Agriculture will certainly not be part of these negotiations. This is a red line for Europe," Malmstroem said

France, which had objected to opening the US trade talks on Monday, also warned that unless the new EU-US trade deal made provisions on climate change then it might block its ratification down the line.

"It is a question of values: Europe must be exemplary and firm in its protection of climate," a spokesman for French president Emmanuel Macron told CNN, a US broadcaster.

At the same time, the US and EU are weighing how to react to a ruling by the World Trade Organisation which said their aircraft makers, Boeing and Airbus, had cheated on free competition rules.

The US aims to impose €10bn of tariffs on EU products, including cheese and wine.

The EU is preparing a list worth €18bn on US products, including fish, tobacco, and video games, with further details due out on Wednesday.

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