Against a backdrop of increasing trade tension fed by the isolationist and protectionist stance of the United States, EU heads of state said at the European summit of 28 and 29 June that they backed the multilateral trade system headed by the WTO, but called for the latter’s reform and the drawing up of new rules on subsidies for industry.
In its conclusions document, the European summit calls for ‘preserving and deepening the rules-based multilateral system,’ stressing the EU's commitment to work towards this ‘modernisation.’
The EU28 instruct the European Commission to propose a ‘comprehensive approach to improving, together with like-minded partners, the functioning of the WTO in crucial areas such as (i) more flexible negotiations, (ii) new rules that address current challenges, including in the field of industrial subsidies, intellectual property and forced technology transfers, (iii) reduction of trade costs, (iv) a new approach to development, (v) more effective and transparent dispute settlement, including the Appellate Body, with a view to ensuring a level playing field, and (vi) strengthening the WTO as an institution, , including in its transparency and surveillance function.’
Pursuing a ‘positive’ bilateral agenda. Based on the recent boosting of its trade defence measures, the European Council said that ‘as part of its positive trade agenda, the EU will continue to negotiate ambitious, balanced and mutually beneficial trade agreements with key partners across the world, promoting its values and standards.’
The EU28 call for ‘the legislative proposal on the screening of foreign direct investments to be adopted as soon as possible,’ which now needs to be finalised in trialogue talks between the Council and European Parliament (see EUROPE 12041).
Resisting US protectionism. The European Summit ‘fully supports the rebalancing measures (customs duty on US products to the tune of €2.8 billion, Ed.) -potential safeguard measures to protect our own markets, and the legal proceedings at the WTO, as decided on the initiative of the Commission (adopted by the EU on 22 June, Ed.).’ The measures include a safeguard investigation into steel in response to the raising of US tariffs on imports of steel and aluminium, measures that the heads of state say cannot be justified on the ground of national security.
Finally, as the US president, Donald Trump, threatens to raise tariffs on the import of cars and his administration decided, on a currently provisional basis, in June to impose anti-subsidy measures on imports of black olives from Spain, whose producers receive aid that is authorised by the WTO, the European Summit says: ‘The EU must respond to all actions of a clear protectionist nature, including those calling into question the Common Agricultural Policy.’
Spain slams US attack on CAP. Concerned about the US measures against imports of black olives from his country, the Spanish prime minister, Pedro Sánchez, got his peers to stress the need to not challenge the CAP’s aid system.
On the question of the import duty for steel, the Irish Taoiseach, Leo Varadkar, said: ‘Any retaliatory action of the EU should be proportionate, we should try to avoid escalating this into a trade war, which would be harmful for trading countries like Ireland.’
The German chancellor, Angela Merkel, welcomed the way the EU was remaining firm and united against the unacceptable attacks from its American allies. (Original version in French by Emmanuel Hagry and the editorial team)