WASHINGTON — A top EU official on Wednesday said he hopes the United States and European Union could resume talks this year on a bilateral free trade agreement, despite a transatlantic trade fight over President Donald Trumps decision to impose tariffs on European Union steel and aluminum exports.
“I still hope in the next few months, in spite of the current situation, both sides will create the space for negotiations in trade,” EU chief Brexit negotiator Michel Barnier said in remarks at the U.S. Chamber of Commerce. “We should be building our trade and investment relations, strengthening them and deepening them.”
The United States and the European Union spent several years trying to negotiate the Transatlantic Trade and Investment Partnership, but they didnt seal the deal by the time former President Barack Obama left office in January 2017. There have been no talks on the initiative since Trump was sworn in.
Barniers visit comes just a few weeks after the EU imposed duties on about $3.3 billion worth of U.S. goods, including steel, agricultural products, boats and clothing, in retaliation for duties Trump set on about $7.5 billion worth of EU steel and aluminum to protect national security. Trump is also threatening duties on European Union auto exports, using the same national security justification.
Trump complains that current transatlantic trade relationship is unfair because the United States has a $151 billion trade deficit in goods with the EU.
But Barnier, who is scheduled to meet with U.S. Trade Representative Robert Lighthizer and other administration officials this week, argued the relationship is roughly in balance because the United States enjoys a $50 billion services surplus with the EU and a 100 billion euro surplus on income earned by American companies invested in the EU.
Barniers main job is negotiating with the United Kingdom on its exit from the EU. He said he remained hopeful that an agreement can be reached and ratified in time for the U.K. to leave by the target date of March 29, 2019. After that, there will be a 21-month transition period during which time the U.K. and the EU hope to reach agreement on the future terms of their economic relationship.
Once the U.K. enters the transition period, it will be able to negotiate free trade agreements with other countries, including the United States, but any deals cant go into force until January 2021.
The Trump administration has signaled its interest in a bilateral trade deal with the U.K. once it is out of the EU. At Wednesdays Chamber event, Barnier said U.S. businesses need to prepare for the U.K. and the EU splitting into two different markets, with different requirements at the border.
He also reminded the audience that the EU will still be the United States biggest trade and investment partner “by far,” even after the U.K. is out. The U.K. is currently the second-largest economy in the European bloc, behind Germany and just slightly ahead of France.