US-EU trade negotiations are deadlocked, Malmström says

Almost a year after the joint US-EU statement, “there is a stalemate” in trade negotiations, Commissioner Cecilia Malmström conceded on Tuesday (23 July) speaking before the European Parliament.

The talks on a trade agreement concerning the elimination of tariffs on industrial goods between Brussels and Washington have not started yet, Malmström told the members of the International Trade Committee.

The US is not ready to negotiate unless agriculture products are included in the agreement. But agriculture “is a red line for us,” EU’s trade chief said. “We don’t have a mandate to enter in agriculture. So yes, there is a stalemate. Can we overcome this? I don’t know,” Malmström admitted.

Nevertheless, the Commissioner recalled that the counterparts are working towards an agreement on a conformity assessment and voluntary regulatory cooperation to reduce red-tape. “This would be mutually beneficial for companies on both sides of the Atlantic,” she stressed.

Going beyond, however, seems unlikely. “Five years ago when I started this mandate, all trade debates were about TTIP,” Malmström said, “it was difficult already under the former administration and it turned out to be quite difficult with the new administration as well.”

“Due to the US announcement to withdraw from the Paris agreement, we do not see a possibility for a comprehensive trade agreement with the US today,” she told the MEPs.

“Although there are tensions in our trade relations, there is a mutual interest to maintain a positive agenda,” Malmström said.

In July last year, amid rising tensions between the EU and the US, Jean-Claude Juncker travelled to Washington to meet President of the United States Donald Trump. On a joint statement, they agreed to strengthen commercial cooperation at various levels.

The Commission is expected to release a report later this week to take stock of the progress made in the past few months. In spite of the ongoing work, differences on both sides of the Atlantic remain important and the situation could be worsening soon.

EU’s final push for Airbus & Boeing

Europe and the US are facing a potentially bitter end to the 15-year-long dispute about allegations of illegal subsidies concerning plane-makers Airbus and Boeing.

Trump said in April he was ready to hit European exporters with $11 billion duties in response to the public money given to Airbus, while the EU threatened the US with around $19 billion of tariffs in response to Boeing subsidies.

Director-General for Trade at the Commission, Sabine Weyand is in the US in a bid to avoid the mutually harmful restrictive measures. “We would hope that we can close that chapter in our relationship,” Malmström said.

The EU could face further tariffs on cars imports in the coming months too. “We welcome the decision not to impose yet duties on cars and car parts but the very notion that the European cars can be a security threat to the US is, of course, absurd,” the Commissioner told MEPs.

If there were to be tariffs, the Commissioner warned, the EU is ready to put forward a rebalancing list worth €35 billion. “I do hope that we don’t have to use that one,” she insisted.

Trade as a tool for change

As she addressed the newly elected members of the European Parliament Committee on International Trade, Cecilia Malmström presented the latest commercial achievements of the EU –the agreements with Vietnam and Mercosur.

MEPs questioned the EU’s trade potential in promoting human and labour rights and the fight against climate change. The Commissioner defended that “trade agreements can be a force for good.”

“If we disengage with the countries, would it be better?” she wondered while pointing out the need to combine commercial relations with development assistance and political cooperation.

“A trade agreement alone cannot save the Amazon. But it can be an important tool,” the Commissioner stressed. She recalled that the EU is including the respect to the Paris Agreement in its trade agreements making it binding for the signing countries.

However, the Parliament questioned the EU’s ability to enforce both clauses regarding the protection of human rights or environment. While Malmström admitted the limits, she rejected the possibility of introducing sanctions. “It sounds well but it does not work in practice,” she said.

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