Brussels has launched a bid to revive negotiations with the US on ending the two sides’ trade disputes, proposing a joint agenda covering everything from aircraft subsidies and lobster tariffs to shared reserves of medical supplies.
EU trade commissioner Phil Hogan has told his US counterpart Robert Lighthizer that there is scope to reach an agreement that would end more than a decade of litigation at the World Trade Organization over subsidies to Airbus and Boeing.
He also said the bloc wanted to end a two-year dispute over US tariffs to protect steel producers and increase co-operation in other areas as part of efforts to mitigate the impact of coronavirus on the global economy.
In a letter to Mr Lighthizer dated April 30, and seen by the Financial Times, Mr Hogan pitched what he described as “a transatlantic agenda for recovery” that also calls for the EU and the US to work together to prevent any repeat of the shortages that have bedevilled national healthcare systems in recent weeks.
One idea pitched by Brussels is that the EU and the US could draw inspiration from the International Energy Programme established after the 1973 oil shock and create “joint reserves” of medical equipment.
The letter underlined Brussels’ urgency to mend fences with the Trump administration and work together in the Covid-19 era. EU-US disputes in recent years have led to products from Harley-Davidson motorcycles to French wine being hit with punitive tariffs. US business is also keen for a de-escalation ahead of a WTO decision next month that is expected to authorise the EU to take retaliatory action against US subsidies for Boeing.
Before the pandemic took hold Mr Hogan had expressed optimism that a “mini-deal” could be struck with Washington that would address President Donald Trump’s complaints about barriers facing US exports while opening up new market opportunities for the EU. Ideas examined by Brussels have included reducing EU tariffs on imports of cars as well as both sides expediting sluggish regulatory approval processes for meat and fruits.
A note attached to Mr Hogan’s letter said that Brussels “has responded to the US request to consider reducing tariffs on motor vehicles and lobsters” among other issues. It added that any deal would need to be “balanced” for both sides.
“I remain of the view that concluding the trade package we are working on would send a very positive message,” Mr Hogan wrote in the letter, which was sent ahead of a call with Mr Lighthizer on Monday.
Mr Hogan said that a particular cause for concern was the dispute over Airbus and Boeing, writing that it was “becoming impossible to explain why the EU and US continue to be locked in a self-defeating cycle of tariffs and mutual recriminations over aircraft subsidies”.
Last year, the WTO authorised the US to impose levies on $7.5bn of European goods after the EU was found to have failed to eradicate illegal support for Airbus aircraft. A WTO decision on the EU’s permitted retaliation against the US is expected in late June.
The note attached to Mr Hogan’s letter suggested that “negotiations for a fair and balanced settlement to the Boeing/Airbus dispute can be intensified with a view to their early conclusion”.
The note also said Brussels is waiting “for a signal from the US to engage in full and mutual de-escalation” of their dispute over steel, which dates back to Donald Trump’s decision to hit imports of the metal with punitive tariffs in 2018.
And drawing on the historical example of strategic oil reserves, it added that, “while oil and medical supplies are certainly very different . . . some principles such as the establishment of reserves, production switching capabilities or standby capacities are comparable, as is the commitment to collaborative action”.
The EU also wants to discuss regulatory steps to smooth transatlantic trade in medical devices and vaccines.
Source: Economy - ft.com
