US Trade Representative Katherine Tai will be in Brussels on Tuesday 17 January to meet European Commissioner for Trade Valdis Dombrovskis. On the agenda is the global agreement on sustainable aluminium, which must be reached before the end of October, and of course the US Inflation Reduction Act (IRA).
Both sides are still trying to find solutions to avoid the IRA having a discriminatory effect on European producers (see EUROPE 13091/11). However, it will be necessary to wait until the end of March to have clear answers on the elements that remain to be clarified around the IRA.
At an event organised by the think tank European Policy Centre, Matthias Jorgensen, Head of Unit for the United States and Canada at the European Commission’s Directorate-General for Trade (DG Trade), lamented the exclusive nature of the IRA. He sees this as “a broader risk to the World Trade Organization (WTO) system and the idea of rules-based trade”.
Despite a growing openness to more protectionist measures in Europe (see other news), Mr Jorgensen is unwilling to accept an ally like Washington imposing discriminatory measures against the EU. He also insisted that European subsidies do not only benefit Europeans, and are nothing like those being suggested by the United States in terms of quantity and value.
The climate, health and geopolitical crises require such measures, however, argued one of his interlocutors, US economist Chad Brown of the Peterson Institute for International Economics. “Excessive geographical concentrations are no longer imaginable for politicians today. What constitutes an industrial response are discriminatory measures, i.e. subsidies, tariffs, or local production conditions. This is the reality of the economy”, he said.
For him, the clarifications made by the US Treasury at the end of December, potentially allowing European vehicles purchased under leasing arrangements to benefit from tax credits, demonstrate a certain flexibility and show that Washington is not against the EU. (Original version in French by Léa Marchal)