US protectionism
Trade relations between the EU and US have been rocky since Donald Trump was elected on a platform of protectionism and nationalism. Negotiations on a Transatlantic Trade and Investment Partnership (TTIP) were stopped until further notice at the end of 2016.
When Trump imposed additional import duties on steel and aluminium imports, MEPs called the move unacceptable and incompatible with WTO rules. MEPs also expressed concern about US customs duties on Spanish olives, imposed in January 2018 after the US deemed they were being imported at below market price.
Tensions escalated last year when Trump threatened to slap additional tariffs on European cars in the name of national security. Jean-Claude Juncker, president of the European Commission, met Trump on behalf of the EU to discuss the threat and the two agreed to relaunch trade talks.
Trade talks
The European Commission will negotiate on behalf of the EU, but its mandate requires approval. The EU Council of Ministers is expected to adopt a draft negotiating mandate in March 2019.
Any deal resulting from these talks has to be approved by the European Parliament before it can enter into force.
Different priorities
A successful conclusion is far from assured as the EU and US disagree on various issues. The EU is keen to protect its car industry, while the US is keen to force the EU to make it easier for American farmers to sell their products in Europe. Traditionally, the EU has been more cautious when it comes to food production, banning products such as beef treated with hormones and chickens washed with chlorine.
German S&D member Bernd Lange, chair of the international trade committee, said: “I’m not sure what will happen, but let’s see. And yes, I think the whole strategy behind the draft mandate for the negotiations is of course to calm down the situation and perhaps gain some time.”
Lange was the lead MEP for the TTIP talks. He said the situation had changed significantly: “Of course we have a new government in the United States and it makes a big difference. This government has a clear new trade strategy built on two pillars. One is to get investment back to the US, therefore they have protective measures. The second pillar is to keep China down and try to narrow its influence.”.
“Of course, we are trying to create a rule-based trading system. Our bilateral agreements are based on clear rules and not on power.”
The role played by Congress and the European Parliament
Lange said Parliament could play an important role in fostering relations between the EU and the US noting the many contacts it has with Congress and stakeholders. .
“In the constitution of the United States, trade is a right belonging to Congress and they have some delegated acts to give power to the president. Both parliaments are playing an important role...both are needed to create a bit more order in this globalised world on trade and security.”
Going bananas: examples of previous trade conflicts
The US and the EU have clashed over trade before, for example over duties on bananas, which made it easier for some countries in Africa, Caribbean and the Pacific to export to the EU at the expense of Latin American countries.
The EU has also been at odds with the US and Canada over beef treated with hormones, which it considered a potential health hazard. This was resolved in 2012 when the EU agreed to increase imports of hormone-free beef from the two countries.
Ref.: 20190214STO26415
