How Europe lost faith in the power of EU-US trade talks

Stay informed with free updates

Simply sign up to the EU trade myFT Digest — delivered directly to your inbox.

Good morning. Nato members gave a decidedly mixed response to the alliance’s proposal that it should replace the US in managing co-ordination of military supplies to Ukraine — alongside a $100bn fund to support Kyiv for five years — pitched as a plan to “Trump-proof” that aid. But, its head said, all agreed to keep talking about how it could work.

Today, our technology correspondent previews an expectedly lacklustre meeting of the once-vaunted EU-US trade framework, and our energy correspondent has new data showing most EU member states are breaking promises to cut taxpayer spending on fossil fuel subsidies.

Let-down

Top EU and US officials are gathering in Leuven today for talks on key trade and technology issues, but critics say these meetings have lacked ambition and have led nowhere — particularly on trade, writes Javier Espinoza.

Context: The EU-US Trade and Technology Council (TTC) was supposed to be a forum where senior officials met to iron out key challenges around transnational trade and digital issues. This week’s meeting, which runs into Friday, is the sixth iteration.

Instead, critics argue, the meetings have been filled with platitudes and good intention but not much in the way of outcomes.

As top figures, including US secretary of state Antony Blinken and the EU’s digital chief Margrethe Vestager meet for the last time before the EU and American elections later this year, Brussels insiders say they fear the TTC has lacked oomph.

Take trade, for instance. Neither side reached a meaningful agreement on tariffs. In 2018 the Trump administration imposed tariffs on steel and aluminium coming from Europe and in retaliation Brussels put tariffs on US-made goods like whiskey, jeans and Harley-Davidson motorbikes.

The TTC failed to come up with a definitive agreement to stop this trade tariffs war.

“What is the TTC now?” asks one EU diplomat: “The trade part is dead and the technology part is dying.” Others put it more bluntly: “It’s a lot of blah, blah,” said a seasoned lobbyist.

Brussels officials concur not much was agreed on trade but blame it on the Americans.

“It’s not the TTC’s fault. The US administration has not been interested in striking trade deals,” said one. The same person said the TTC has been quite successful on the tech front, pointing to an AI code of conduct that was later adopted by the G7 and transparency over the supply of chips, which has prevented companies from playing both sides against each other.

And some think it’s the right forum to have even if it didn’t meet expectations: “There is regret on what the TTC achieved but it’s still an important forum for discussion,” said a second EU diplomat.

Chart du jour: Keep on cooling

Eurozone inflation fell to 2.4 per cent in March, below forecast and continuing a downward trend, bolstering expectations that the European Central Bank will cut interest rates by the summer.

Taxpayer emissions

Pressure is heating up on policymakers to stop burning public money on fossil fuels. But some EU countries are not living up to commitments made in 2022 to phase out subsidies for oil and gas, writes Alice Hancock.

Context: Loans and guarantees from export credit agencies provide the biggest source of international public finance to the oil and gas sector. Between 2019 and 2021, G20 countries channelled $33.5bn a year on average towards fossil fuel projects — seven times more than to renewables, the US campaign group Oil Change International has found.

Back in March 2022, EU leaders committed to set deadlines for phasing out export credit to fossil fuels by December 2023. But a new report led by the NGO Both ENDS has found that few of them have stuck to that promise.

Only 13 member states have a published phase out policy for fossil fuel support, among whom Austria, Slovakia and Slovenia will continue to fund coal, oil and gas projects up to 2030, the report said.

Croatia, Czech Republic, Greece, Latvia and Romania have no published fossil fuel subsidy phase out policy at all, the researchers found, “and have thereby not complied with what was agreed in the [EU] Council”.

The International Energy Agency has said that if the world is to keep global warming to within the 1.5C limit set by the Paris Agreement of 2015, no new coal, oil or gas developments can be made.

Discussions are continuing at the OECD over the phase out of export credits for fossil fuels (another element that leaders agreed to push in 2022) but proposals posited by the EU and UK to bring them to an end have been met with resistance from other major economies, including the US.

What to watch today

1. Nato foreign ministers celebrate the alliance’s 75th anniversary at 9.00am, closing press conference at 4.25pm.

2. Officials gather for the EU-US Trade and Technology Council meeting in Leuven.

Now read these