One year after US President Donald J. Trump and European Commission President Jean-Claude Juncker’s joint statement on trade, part of the two side’s attempt to ease trade tensions, the EU executive has released a full report on the current state of play of the relationship.
The Commission has insisted that its assessment of the statement made in the White House a year ago is not intended as a negotiating ploy which is aimed at further avoiding an escalation of the situation as several key deadlines are rapidly approaching, which could see both sides impose additional tariffs on one another.
The EU’s 28 members gave the Commission a mandate to start negotiations on reducing trade barriers on industrial goods in April, but subsequent talks have yet to begin. Several of the bloc’s members are unhappy with the lack of progress in the discussions. France, in particular, has tried to block any decision by the Council of Ministers after the US opted to withdraw from the Paris Climate Agreement.
Cecilia Malmström, the EU’s trade commissioner, admitted to the European Parliament earlier in July that the negotiations with Washington have reached a stalemate due to Europe’s refusal to negotiate Brussels’ large agricultural subsidies, a key sticking point in the talks with the US.
The Americans declared in May that some imported vehicles and European-made car parts pose a major threat to the US market, putting a decision regarding additional tariffs on hold until mid-November.
“We welcome the decision by the US not to impose duties on cars and car parts. Of course, the very notion that European cars can be a national security threat is absurd,” Malmstrom said, adding that the talks have made no progress towards a proposed deal that would remove tariffs on industrial goods.
Talks aimed at reducing red tape for companies in the EU and US for products that require third-country assessment have been ongoing. Technical contacts have taken place in this area, with full negotiations expected to start in the autumn.
The EU also wants to import more liquefied natural gas (LNG) from the US to diversify its energy supply away from Russia, a development that would be a key victory for the US. LNG imports have tripled since last year’s EU-US joint statement, reaching a record of more than 1.4 billion cubic meters valued at around €0.3 billion in March, while the import of American soybeans to the EU has almost doubled.
Speaking about WTO reform, Malmström acquiesced to complaints from the White House that the World Trade Organization is in dire need of being recalibrated to better reflect today’s trade dynamics but insisted that the framework that is in place remains the best possible system to work from.
The US, EU and Japan have jointly proposed to enhance WTO members’ compliance with transparency requirements. Europe and Canada announced on 25 July that they have reached an agreement on an interim arbitration appeal arrangement that would be applicable to disputes between both partners if the situation at the WTO does not improve.