The informal meeting of European trade ministers in Innsbruck on Friday 5 October revealed that the European Union is still like a cat on hot coals as regards its trade relations with US President Donald Trump's administration.
European Trade Commissioner Cecilia Malmström informed the member states about the progress made as part of the roadmap established by Trump and European Commission President Jean-Claude Juncker in July (see EUROPE 12071).
This progress seems mainly to target regulatory cooperation. "We are trying to identify a way forward focusing now on voluntary cooperation when it comes to certain standards and regulations", Malmström said.
The preparatory work carried out by the Commission's negotiators over the years has enabled avenues to be identified very quickly that can lead to swift implementation, to give Washington early results. These avenues focus on sectors where the respective regulations already seem compatible, such as food safety, new technologies, pharmaceuticals and medicines.
A technical meeting will take place at the end of October to test the US reactions to these proposals, and possibly to identify other points for discussion.
The restricted tariff agreement on industrial products "is not immediately on the table", Malmström said. She added that the 'scoping' exercise of the agreement had not been formally launched. Some member states have reportedly asked the Commission for more detailed information as to the cumulative impact of the ongoing trade negotiations.
These discussions have not yet enabled a solution to be found on the US tariffs on steel and aluminium. "We have not made any progress at this stage, unfortunately", Malmström admitted.
Threat of sanctions on cars still hovering. When they arrived in Innsbruck, several ministers said they were concerned about the possibility of tariffs on cars. While the US inquiry under Section 232 has not yet finished, the Commission already considers US tariffs on EU cars a real possibility.
"We are ready. We have said so to the US, that we would take (compensatory) measures", Malmström told press, adding that along with the member states she was preparing a list of products "which would then of course be much longer, more extensive". As for the precedent created by the US-Mexico-Canada agreement, particularly the institutionalisation of Section 232 and the voluntary restrictions on cars accepted by Canada and Mexico (see EUROPE 12110), Malmström said the EU could not accept any of these measures infringing the rules of the WTO.
European unity on WTO reform. The ministers reiterated their common ambition in Innsbruck for an in-depth reform of the WTO and global rules (see EUROPE 12098), particularly to resolve the acute crisis of the appeal body for resolving disputes.
Malmström stated that she would continue the trilateral discussions with her US and Japanese counterparts in the coming months and that her staff have "started to draft" new WTO rules on subsidies to industry.
An informal meeting with Chinese leaders will take place next week with the aim of engaging Beijing in this reform. Malmström will also meet other "like-minded" trade partners to the EU in Ottawa at the end of October.
Mercosur agreement before the end of the year? Dispelling the rumours that negotiations with Mercosur will be suspended, Malmström stated that everything was still possible before the end of 2018. "We are very ready but there are still difficult things, which is normal", she said. The Brazilian presidential elections of 7 and 28 October offer a very hazy political outlook. The elections could indeed see the victory of radical leader Jair Bolsonaro, who is described as a Brazilian Donald Trump.
"There is always the possibility of concluding this agreement (...) I don't think the electoral date will put all this process in danger because the new administration will not come for the end of the year anyway", Malmström said. (Original version in French by Hermine Donceel)