The EU27 trade ministers have been in Stockholm since Thursday 9 March for an informal meeting at which transatlantic relations are at the heart of the discussions, while the President of the European Commission, Ursula von der Leyen, is in Washington. They are also looking at the place of trade in the debate on European competitiveness and trade relations with Ukraine.
On Friday 10 March, Ms von der Leyen will meet with US President Joe Biden to discuss the details of the implementation of the Inflation Reduction Act (IRA). The aim is to obtain guarantees that the EU will be treated as a trading partner of the US, like Canada and Mexico, and will benefit from certain IRA subsidies on batteries for electric vehicles.
The Commission is optimistic that the talks between the two leaders will result in a positive outcome. To this end, the idea of a partnership or memorandum of understanding on critical raw materials with the US has been raised by several actors and could potentially qualify the EU as a trading partner. The details of such a partnership will have to be formalised at a later stage, but the joint EU-US declaration, which is expected to be adopted on Friday evening, could be the occasion to announce an agreement, a source said.
On the other hand, Ms von der Leyen wants to enter into a dialogue with the United States on the subject of public subsidies. The aids provided for in the IRA are very high and include, in particular, ‘local content requirements’ that are contrary to World Trade Organization rules.
In Stockholm, the ministers hope to be briefed by the Commission on the work of the EU-US Task Force on the IRA (see EUROPE 13051/26). They are also waiting for indications of what Ms von der Leyen expects to achieve in Washington, although the meeting with Mr Biden will not take place until after the informal ministerial meeting.
It should also be noted that the US has yet to publish guidance on the IRA in March, which will outline the implementation.
Trade’s contribution to European competitiveness
The European Trade Strategy is an integral part of the European Commission’s Green Deal Industrial Plan (see EUROPE 13112/4) and Member States have repeatedly stressed the importance of trade for EU industry in the long term (see EUROPE 13118/2).
A broad debate is expected on the subject in Stockholm, rather than an exchange of views on each trade agreement under discussion. It could therefore include other types of trade relations than free trade agreements, such as digital partnerships, like the EU-US Trade and Technology Council, which has been replicated with India.
Trade with Ukraine
Finally, the ministers will discuss trade relations with Ukraine, and how to support Kyiv through this. The discussion, mostly informal, should allow, among other things, to collect feedback on the extension of the autonomous measures the EU took last year to suspend tariffs on Ukrainian imports.
The Commission has proposed to extend the measures by one year from June 2023 and the EU legislator must decide on it by then (see EUROPE 13128/4).
“Member countries are affected differently by increased trade in agriculture, so we need to discuss this”, said one diplomat (see EUROPE 13136/4). (Original version in French by Léa Marchal)