On Thursday 15 May, the EU trade ministers were briefed by the European Commission on the latest developments in discussions with the United States. The EU27 have sent a clear message to the Commission and Washington: a negotiated solution that would maintain a 10% US tariff on European products is not acceptable.
The ministers largely defended this position at a time when the United Kingdom and the United States announced an agreement on 8 May that maintains the basic tariff of 10% on British exports.
“If the UK-US deal is what Europe gets, then the US can expect countermeasures from our side. We would not be happy with that kind of deal”, reiterated Sweden’s Trade Minister, Benjamin Dousa, on his arrival in Brussels.
His French, Polish, Finnish, Austrian and Irish colleagues joined him on this point in front of the press. “We are frankly too big, too important to US, to have a trade deal that is deeply unbalanced”, said the Polish Under-Secretary of State for Economic Development, Michal Baranowski, after the meeting of ministers that he chaired.
Negotiations are continuing. The European Commissioner for Trade and Economic Security, Maroš Šefčovič, informed the ministers of his telephone call yesterday with the US Secretary of Trade, Howard Lutnick. “We have agreed to intensify discussions at technical level”, said Mr Šefčovič on his arrival at the Council of the EU. He said he hopes to meet US Trade Representative Jamieson Greer in Brussels in the coming weeks, or at the OECD ministerial meeting in Paris on 3 and 4 June.
On a technical level, discussions are currently focusing on the steel, semiconductor, automotive and critical raw materials sectors.
But the Commission remains clear that it will certainly not be able to get rid of all the US tariffs imposed since the start of the year.
Retaliation measures. The Commission is therefore seeking views on its new list of US products that could be subject to customs duties if negotiations fail (see EUROPE 13636/1).
Several Member States have called for caution regarding these potential measures. “We will have to be vigilant with regard to all the players who are perhaps more vulnerable than others, because they cannot be relocated and are sometimes very symbolic of our territories”, the French Minister Delegate for Trade, Laurent Saint-Martin, told Agence Europe. He was referring in particular to French wines and spirits, which are subject to retaliation by Washington.
Maroš Šefčovič was reassuring: the Commission will proceed cautiously with the rebalancing measures.
Strengthen other partnerships. Against this backdrop of trade tensions, EU countries are speaking with one voice to call for stronger trade ties with partners other than the United States. But Austria is going even further: it has put forward the idea of extending the European Economic Area (EEA) beyond Europe’s continental borders, to include countries that already have extensive trade relations with the EU, such as Canada and even Israel.
In addition to free trade, the aim would be to harmonise border procedures, establish common standards and mutual recognition.
Sweden agreed with this proposal and even made another: the EU should work more closely with the members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), or even join it, according to the Swedish Trade Minister.
However, several other countries, including France, were cautious about these proposals, explaining that the priority was first to deal with trade agreements under negotiation or in the ratification phase. (Original version in French by Léa Marchal)