In 2018, trade tensions between the US and EU led to European president, Jean-Claude Juncker, travelling to meet with Donald Trump. Following this, the EU-US joint statement was released, and a provisional agreement was reached.
The statement read: “We agreed today, first of all, to work together towards zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.”
So, one year on, what has changed?
It seems that, according to a report released by the European Commission last week on the current trade relationship, commercial negotiations have reached a stalemate.
In the last year, a group was established to try and deliver the commitments that were made. This group was co-chaired by Commissioner for Trade Cecilia Malmström and US Trade Representative Robert Lighthizer.
Earlier in the week, Cecilia Malmström said to the European Parliament that negotiations have reached a stalemate. She explained that the US would only consider a deal if it included agricultural products, which is, according to Malmström, “a red line”.
In addition to this, the statement from last year said:
“We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans.”
The EU says that “very good progress” has been made in this area, and that there has been regulatory cooperation across these industries, as well as in cybersecurity and medical devices.
In April, EU member states approved a mandate for talks to begin between the EU and the US on how to reduce red tape for companies on products that require an assessment from a third party. Further negotiations on this could start later in the year.
After Trump applied tariffs on European steel and aluminium, as well as threatening to do the same with European cars, the statement said: “While we are working on this, we will not go against the spirit of this agreement, unless either party terminates the negotiations.”
However, these tariffs are still in place and the threat of further restrictions being added to these products. Malmström warned that the EU is prepared to respond with its own measures’ worth around €35 billion, although this could put the entire agreement at risk.
Juncker and Trump also spoke about the possibility of WTO reforms: “We will work closely together with like-minded partners to reform the WTO and to address unfair trading practices,” they said.
Malmström stated: “The situation at the WTO is very worrying. The WTO is not perfect but it is the best system we have and without it, it would be total chaos”.
In a joint proposal, the EU, the US, and Japan, said they hope to improve transparency within the WTO. But, with the US continuing to block members being appointed, this goal is becoming harder to reach.
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