Trade

EU-US trade talks move forward, but problems remain

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Brussels cleared the hurdle Thursday for launching trade talks with the United States, but the real difficulties are yet to come.

Almost a year after EU leaders first offered a limited trade agreement to U.S. President Donald Trump, the blocs ambassadors reached an “agreement in principle” on negotiating directives that authorize the European Commission to start talks. EU ministers are set to issue the formal approval Monday, without any discussion.

France had raised objections until the last moment. With next months European Parliament election looming, President Emmanuel Macron feared that the talks would revive a politically toxic trade debate that plagued previous negotiations for the Transatlantic Trade and Investment Partnership (TTIP).

“In accordance with the commitment of the President of the Republic, France is opposed to the initiation of any trade negotiations with countries outside the Paris climate agreement,” a French official said, adding: “It is a question of values: Europe must be exemplary and firm in its defense of the climate. France has therefore indicated that it is voting against this trade mandate[s].”

The Commission hopes to avoid such controversy by keeping the new trade deal simple: Its mainly supposed to eliminate industrial tariffs — promising almost equal gains on both sides — while excluding any talks on the contentious area of agriculture and food standards. EU trade chief Cecilia Malmström is holding out hope that such a limited agreement could be “quite quick” to negotiate.

Trump, however, is having none of it. The president wants to use the talks to slash Americas $150 billion trade deficit with the EU, and insists that Brussels must also open up its agricultural market and lift trade barriers such as a ban on American hormone-treated beef. On Thursday, he launched a fresh attack, accusing the EU of being “a brutal trading partner.”

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The prospect of trade talks with the U.S. doesnt please everyone.

“We may be ready to launch negotiations, but its difficult to see how we can find a common ground,” said Bernd Lange, chair of the European Parliaments trade committee. Lange already suggested in February that the planned talks are just a charade to deescalate transatlantic trade tensions and stop Trump from imposing high tariffs on auto imports.

For now, the main hope seems, indeed, to be that launching negotiations will help stabilize the strained economic relations between Brussels and Washington.

“We will hopefully have less tweets and unilateral actions, and more of a constructive debate between both sides,” said Luisa Santos, director for international relations at BusinessEurope, Europes largest business lobby. “This could be a good vehicle to let the steam off.”

EU diplomats and Commission officials have outlined a negotiating approach under which the talks could be conducted in stages, with both sides first concentrating on the less controversial areas, such as the removal of tariffs for industrial products — an area where they had already made lots of progress in the TTIP discussions.

The understanding in Brussels is that U.S. demands on agriculture could be potentially addressed at a later stage, provided that the Americans lift their steel and aluminum tariffs, renounce the car tariff threat, and come Read More – Source

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