Against a backdrop of growing commercial tension, fuelled by the USA's isolationist and protectionist tendencies, the heads of state or government of the EU are expected, at the European Council of 28 and 29 June, to reaffirm their support for the multilateral trade system governed by the WTO, whilst calling for the institution to be reformed and new rules drawn up, for instance on industrial subsidies.
“The EU has the opportunity to demonstrate the need to update the WTO rules and to extend some ideas shared with the United States and Japan, such as the drafting of new global rules on industrial subsidies, to ensure a better protection of intellectual property rights and against forced technology transfers”, a source close to the President of the European Council, Donald Tusk, explained on Wednesday 27 June.
In its conclusions, the European Council is expected to call for the multilateral rules-based system to be preserved and deepened and reiterate the EU's commitment to work for this modernisation.
The 28 will invite the Commission to propose a global approach to work with like-minded external partners to improve the functioning of the WTO in critical areas such as: - flexible negotiations; - new rules to respond to new challenges such as industrial subsidies, infringements of intellectual property rights and forced technology transfers; - a more effective and transparent dispute settlement system, including the appeals body, to ensure a level playing field; - reinforcing the WTO as an institution, including in its transparency and supervisory function; - a new approach to development.
Continuing the positive bilateral agenda. The European Council is expected to confirm the EU's positive bilateral trade agenda, seeking to negotiate “ambitious, balanced and mutually beneficial” agreements with key partners whilst promoting its values and standards. It will call for the revised global agreement with Mexico to be finalised and for negotiations with Mercosur to conclude, and will confirm its support for talks recently launched with Australia and New Zealand.
The 28 will also call for the rapid adoption of the proposed mechanism to filter third-country investments entering the EU (see EUROPE 12041).
Resistance to Donald Trump. The European Council is also expected to support the measures taken by the Commission in response to the increase in US tariffs on imports of steel and aluminium: the 'rebalancing measures' (customs duty against American products for a total of €2.8 billion), which has been notified to the WTO and adopted by the EU on 22 June following approval by the member states (see EUROPE 12047); recourse to the WTO; a safeguard investigation into steel.
Although it is still too early for this case to be referred to in its conclusions, the European Council is, according to several diplomatic sources, expected to discuss measures to be considered in the event of an increase in American tariffs on cars, which is being threatened by the American President, Donald Trump.
“So far, our efforts with Mr Trump do not seem to be paying off. Our discussions on the commercial plank will be added to by a broader discussion on the transatlantic relationship”, a Luxembourg source told us.
“The transatlantic relationship is tense. But it must be taken within a longer-term perspective, which will allow us to be less emotional”, a Hungarian source added. (Original version in French by Emmanuel Hagry, with the editorial team)