EU Moves on U.S. Trade Deal

The European Union’s (EU’s) executive arm is preparing to ask the bloc’s governments for the green light to start negotiations with the United States on a free-trade deal, highlighting hopes of keeping at bay the threat of American tariffs on foreign cars.

The European Commission said it has begun work on a draft mandate for a trans-Atlantic accord to cut duties on industrial goods. The commission is also drawing up a request for permission to reach an agreement with the U.S. on “conformity assessment,” part of a parallel push for deeper regulatory cooperation.

The moves announced on Wednesday in Brussels came a day after EU trade chief Cecilia Malmstrom conferred in Washington with U.S. counterpart Robert Lighthizer on enacting a political agreement last July to remove barriers to trans-Atlantic commerce.

“Discussions will continue at technical level this week in Washington,” the Brussels-based commission said in an emailed statement. It gave no timetable for producing its draft negotiating mandates to the bloc’s 28 national governments.

The EU has focused on the possibilities for a deal to remove tariffs on industrial goods in general and for closer regulatory cooperation in sectors such as pharmaceuticals and medical devices.

The European goal is to prevent U.S. President Donald Trump from making good on threats to hit foreign cars and auto parts with tariffs based on the same national-security grounds he used last year to impose controversial levies on foreign steel and aluminum. The commission estimates that a 25 percent tariff on cars would add 10,000 euros (US$11,453) to the sticker price of European-built imports into the U.S.

Trump and Commission President Jean-Claude Juncker reached an agreement in July to put on hold the prospect of U.S. automotive tariffs and to “work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.’’

The EU is willing to include cars in the scope of any tariff-cutting pact with the U.S. and is counting on the Trump administration to refrain from imposing auto duties while talks between both sides continue, Malmstrom told reporters on Wednesday in Washington. She repeated the EU’s opposition to making agriculture part of any trans-Atlantic trade deal.

Separately on Wednesday, the EU warned the U.S. and China to resolve their trade war with a deal that avoids discriminating against European companies.

“We don’t accept any kind of agreement which would distort the level playing field and put the European businesses in a worse position than where we are at the moment,’’ commission Vice President Jyrki Katainen told reporters in Brussels. “The rules must be the same for everybody.’’

From: Bloomberg

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