The announcement of the negotiating mandates with the United States, submitted to the EU Council on Friday 18 January and published at the same time, is part of what the European Commission calls a “positive agenda” with the United States. The launch of this new phase of transatlantic trade relations aims to facilitate trade, while avoiding an escalation of trade tensions. Any US sanctions would cancel out the benefits, the Commission warns.
The European Commission has submitted two recommendations to the Member States, one on the elimination of customs duties on industrial products and the other on conformity assessment (see EUROPE 12168).
A mandate for a “limited” agreement on industrial goods
According to the text of the recommendation, the abolition of these duties, which currently stand at 4.2% on the European side and 3.1% on the American side, should lead to an increase in exports of 10% of European products and 13% of American products. The objective is to achieve a “substantial” elimination of customs duties as soon as the agreement enters into force and a gradual elimination of these duties “within a short period of time”, taking into account the sensitive nature of certain products, including cars, on the United States side. With regard to rules of origin, “negotiations should aim to reconcile approaches [ ...] including procedures of origin”.
A mandate on conformity assessment
This recommendation proposes the negotiation of an international agreement allowing conformity assessment bodies, not established on European territory, to certify the conformity of products with EU laws. According to the Commission, it would reduce conformity assessment costs for economic operators on both sides of the Atlantic by eliminating the duplication of testing, inspection and certification requirements, thereby facilitating access to the respective markets. Only machines and electrical and electronic sectors are explicitly mentioned in the text. The Commission particularly emphasises the expected benefits for small and medium-sized enterprises.
The Commission also points out that this mandate is part of “a broader set of actions to improve cooperation [...] on regulatory issues and on the use of standards in support of regulations”. It also undertakes to consult stakeholders “soon” on these talks, as well as on “other initiatives” for regulatory cooperation with the United States.
A “positive” agenda – which would not survive the negative Washington agenda
However, the Commission warns in its mandates that negotiations will be suspended if Washington were to adopt any new form of sanctions against the European Union – under Section 232, on vehicle imports, but also under Section 301, on intellectual property, or any other similar US law.
In addition, Trade Commissioner Cecilia Malmström confirmed this to the press the same day: in the event of new customs duties, this time on cars, the Commission will impose new and more important rebalancing measures.
Finally, “prior to the conclusion of negotiations, the Commission will confirm that the United States has removed any measures on exports of steel and aluminium”, says the recommendation text.
Many outstanding questions
First of all, nothing is less certain that negotiations that exclude agriculture would be accepted on the other side of the Atlantic. While Ms Malmström recalled that the EU was sticking to the strategy approved by the presidents on 26 July, the summary of negotiating objectives published by Washington on 12 January announced something completely different about US intentions (see EUROPE 12171).
The outlines of the American strategy could very quickly be clarified, and can be summed up as a “agriculture vs cars” bargain. The results of the survey under Section 232 on cars are expected by the end of February at the latest. If new tariff sanctions were to be considered, the US President might be tempted to put them on the balance in order to force the EU to review its negotiating objectives (see EUROPE 12071).
In addition, after the opposition and heated debates over the TAFTA/TTIP, and on the eve of the European elections, will European chancelleries be ready to validate mandates for quick and dirty agreements, i.e. those that do not contain any reference to the ‘sustainable’ agenda of the recent free trade agreements negotiated by the Commission? As “limited” as it is, the agreement on industrial products covers a growing market of €600 billion and represents nearly 95% of European trade with the United States (94% of EU exports and 95% of imports).
To consult the documents: – Conformity assessment: the Recommendation (https://bit.ly/2W4iWQC ) and Guidelines (https://bit.ly/2synJfh ); – Elimination of industrial tariffs: the Recommendation (https://bit.ly/2DhDgqe ) and Guidelines (https://bit.ly/2Cw1Lyk ). (Original version in French by Hermine Donceel)