With the European Commissioner for Trade, Cecilia Malmström, and the American Secretary for Trade, Wilbur Ross, to meet on Tuesday 15 May to seek common ground over a permanent exemption for the EU to the American customs duty on steel and aluminium imports, all eyes are on Sofia, where the leaders of the 28 will meet on Wednesday 16 May to give orientations with a view to settling the transatlantic trade row.
“The US tariffs on steel and aluminium cannot be justified on the grounds of national security. This is why we agreed in March to call for the permanent exemption of the EU from these tariffs”, the President of the European Council, Donald Tusk, reiterated on Tuesday, ahead of an informal dinner on this dossier with the leaders of the EU countries, ahead of the EU/Balkans summit of 17 May in Sofia.
Tusk reiterated that at the European Council of 23 March, the EU leaders had strongly supported the package of counter-measures to the possible American taxes, in line with WTO rules and providing for taxation worth €2.8 billion on American exports.
“While recalling the European commitment to strong transatlantic relations (…), we also underlined our support for dialogue on trade issues of common concern. Tomorrow night I propose we stick to our guns”, said Tusk, who added that “our renewed and full support of the European Commission will strengthen its position in the negotiations with the US”.
“It is clear that it is not the EU that is putting transatlantic trade relations at risk. But we need to be sure that we have done everything in our power, and within the limits of the international trade rules, to avoid a negative scenario”, he concluded.
In late April, the American President, Donald Trump, extended until 1 June the EU's temporary exemption from the American taxes of 25% on steel imports and 10% on aluminium.
To give the EU a permanent exemption from these taxes, Washington is calling for greater openness of the European market. However, the Commission insists that the EU be fully and unconditionally exempted from the American duty before it enters into discussions on other matters.
On Monday 14 May, Ross warned that with the deadline of 1 June approaching, he hopes that a reasonable conclusion can be reached, otherwise the tariffs will enter into force.
“We are open for improving trade relations with the USA, but it is not a concession in order to keep permanent exemption from the higher steel and aluminium tariffs, because there is no reason for those tariffs (…). Before entering into any kind of negotiations, we have to get support from the member states”, the Vice-President of the Commission, Jyrki Katainen, warned on Tuesday.
The Commission has stressed several times that it cannot negotiate tariff reductions or any other market access matters with Washington unless it has a mandate from the 28 member states of the EU (see EUROPE 12004).
In recent weeks, with France echoing the Commission’s position, Germany and Italy have made no secret of their desire for an arrangement including a tariff reduction on certain products and setting aside the most controversial parts of the TTIP negotiations, which have been deadlocked since the end of 2016.
However, several European leaders stressed on 23 March that they did not want talks for any ‘TTIP lite’ agreement involving the treatment of tariff barriers alone.
It is expected that in Sofia on Wednesday, the EU leaders will give orientations ahead of the meeting of the European trade ministers on 22 May, a Bulgarian diplomatic source explained on Tuesday, with Washington hinting that a compromise could be possible if the EU agrees to quotas for its steel and aluminium exports.
It remains to be seen whether the EU is prepared to compromise by accepting a deal with Washington, such as the one concluded by South Korea (accepting a quota limiting its exports of steel to the United States to 70% of their total average exports over the last three years) or Argentina and Brazil but criticised by the Europeans as a mechanism of voluntary export restrictions in breach of WTO rules. (Original version in French by Emmanuel Hagry)