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US-European trade negotiations add chill

April 15, 2019 04:19

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Summary
[US and Europe trade negotiations add chill] As the World Trade Organization determined that the European Union provided illegal subsidies to Airbus, US President Trump recently issued a statement that the United States will impose tariffs on 11 billion US dollars of EU products. He believes that the EU has been using the United States for trade for many years, and this phenomenon should soon stop. (Economic Information Daily)

As the World Trade Organization has determined that the European Union has provided illegal subsidies to Airbus, US President Trump recently issued a statement saying that the United States will impose tariffs on 11 billion US dollars of EU products. He believes that the EU has been using the United States for trade for many years, and this phenomenon should soon stop.

The day before Trump launched, US trade officials have proposed a list of EU products, including large commercial aircraft and components, dairy products and wine, and intend to impose tariffs on these projects in retaliation for the EU’s subsidy. As a counterattack, the EU said it will prepare to provide the United StatesBoeingThe subsidy proposes possible retaliatory measures.

The trade disputes between Europe and the United States have started again, and this will affect the US-Europe trade negotiations that are at a critical juncture.

The progress of the US-European trade negotiations itself has not been smooth. Although the subsidy storm has been around for a long time, it has been 14 years, but the outbreak time node is more critical. Earlier, EU member states convened a meeting to discuss the European Union's "three zeros" free trade negotiations, but it was opposed by France. France believes that the EU can only negotiate with the countries of the Paris Agreement, but the United States has withdrawn from the Paris Agreement. France also proposed that the negotiations on crossAtlanticThe Trade and Investment Partnership Agreement (TTIP) has an impact and the opening time of the free trade negotiations has therefore been postponed. The "flame" caused by the aircraft subsidy that broke out at this time clearly made the situation of US-European trade negotiations more complicated.

The basis for the “three zeros” free trade negotiations is not stable. In the previous US-European trade negotiations, due to the excessive number of industries involved, there were obvious differences of interest, and the two sides covered the agreement.Agricultural productsTrade has been unable to reach an agreement and negotiations are progressing hard. Last year, the US and European high-level leaders reached a consensus and announced the launch of the US-Europe zero-tariff free trade agreement negotiations in July last year. Although the United States is eager to reach an agreement, there are different views within Europe.

The US government’s threat to the EU or the “three zeros” free trade negotiations is difficult to start.

There are reports that the relationship between the United States and Europe is wavering, and the Trump administration has recently threatened that if the "three zeros" free trade negotiations in Europe and the United States cannot be carried out, it is necessary to impose tariffs on EU automotive products for national security reasons.

Although the US government regards automobile tariffs as an important bargaining chip in its hands, the addition of automobile tariffs has a huge impact on the EU economy and has a negative impact on the global economy. A report issued by the German Federal Ministry of Economics in the second half of last year said that if the US government raises the import tariff rate from the current 2.5% to 25%, it will cause a loss of about 5 billion to 7 billion euros for the German auto industry, lowering Germany.GDPAbout 0.2 percentage points.

To this end, when Trump and European Commission President Juncker met in Washington, DC, in July last year, the US agreed to not impose tariffs on EU exports to the United States during negotiations and negotiations. However, EU experts generally believe that the EU has only obtained a temporary respite, and the issue of car tariffs has not been finally resolved. On the other hand, the EU has repeatedly stated that the free trade negotiations between Europe and the United States are based on the cessation of new tariffs. If the United States imposes tariffs on cars imported from the EU, the EU will immediately stop trade negotiations with the United States.

In order to retaliate against the EU's subsidies to Airbus, the United States proposed to impose tariffs on the 11 billion US dollars of products from the European Union. If it is implemented, the already complicated US-European trade problem may be changed again. Considering that the UK is deadlocked on the issue of “Brexit”, the Eurozone economy will be further affected.

The United States and Europe are now in a state of arrogance, and each has submitted a list of retaliation tariffs. However, at present, the EU is open to consultations with the United States, and said that before the levy of retaliation, the EU will ask the WTO arbitrators to confirm the EU's retaliation rights. Of course, if there is no mitigation, the road to US-European trade negotiations will be bumpy.

(Article source: Economic Reference)

                (Editor: DF387)

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