Formal EU-US trade talks begin in February, but the two trade delegations met on January 16 to firm up the bloc’s parameters for talks as Brussels is focused on taking agriculture off the negotiating agenda.
Opening the Single Market to American agricultural goods is a non-starter for a number of EU countries, despite the insistence of successive US administrations.
“We have been very clear that from the EU side, we will not discuss agriculture,” Trade Commissioner Cecilia Malmström told the press recently. The statement was in direct opposition to a 17-page paper submitted by Washington’s trade representative, Robert Lighthizer, who defined the Americans’ objective as “comprehensive market access for US agricultural goods in the EU by reducing or eliminating tariffs.”
If Washington were to insist on agricultural concessions, negotiations could falter as they did during talks on the foiled Transatlantic Trade and Investment Partnerships pushed by the Barack Obama Administration.
As always, there are differences between the two sides, not least of which are European objections to genetically modified food and chlorinated chicken. US trade negotiators also have little patience for European geographic indicators for dairy products.
In any event, both the American and the European farming sectors are heavily subsidised, an issue that is politically challenging for either Washington or Brussels to address without spending considerable political capital on the issue.
US legislators have made it clear that access to Europe’s agricultural market is a precondition to a Free Trade Agreement. The stakes are high, as the “America First” doctrine of the Donald J. Trump Administration has included threatening Europe with auto-industry tariffs, citing “national security” risks. If the tariffs go ahead, they would be a major blow to Germany’s €36 billion market share of the US auto market.
France is usually the champion of the agricultural cause in the EU. Opening the potential Pandora’s Box of the agricultural issue would, however, be a blow to a wide-ranging number of EU countries from Poland to Italy to Romania.
As late as September 2018, the Italian government was threatening not to ratify the EU-Canada Free Trade Agreement, arguing that its agricultural products were not sufficiently protected.
Following a visit by European Commission President Jean-Claude Juncker to Washington last July, the EU doubled the volume of US soybean imports, cushioning the effect of the still ongoing Sino-American trade war.
For the EU, the focus continues to be on non-tariff barriers, namely the mutual recognition of testing, as well as the inspection and certification of manufactured goods ranging from electrical equipment to toys. The Americans are seeking greater access to government procurement while preserving the “Buy American” limits in the US, the Wall Street Journal reports.