U.S. presses EU on trade concerns

Ross challenges bloc’s stance as sides work to solidify truce

President Donald Trump announces in a July meeting with European Commission President Jean-Claude Juncker (left) an agreement to start talks on eliminating EU and U.S. trade tariffs.
President Donald Trump announces in a July meeting with European Commission President Jean-Claude Juncker (left) an agreement to start talks on eliminating EU and U.S. trade tariffs.

US Commerce secretary tests trans-Atlantic trade truce with outburst

U.S. Commerce Secretary Wilbur Ross on Wednesday challenged a fragile trans-Atlantic trade truce by accusing the European Union of dragging its feet over market-opening pledges.

He lashed out at European Trade Commissioner Cecilia Malmstrom for saying the onus is on the United States to come up with proposals to lower tariffs on industrial goods. At a briefing in Brussels on Wednesday, Ross said the 28-nation bloc needed to act on product standards, which he described as equally important.

"Discussing tariffs in the absence of discussing standards is a useless exercise," Ross said a day after he held a meeting with Malmstrom to take stock of EU-U.S. commercial relations. "Both are protectionist."

At stake is how to carry forward a deal in July between President Donald Trump and European Commission chief Jean-Claude Juncker that put on hold possible U.S. automotive duties.

Trump on June 1 imposed tariffs of 25 percent on steel imports and 10 percent on imported aluminum from the EU. He said the move was to protect U.S. national security interests, but the Europeans claim it is simply protectionism and breaks global trade rules.

The EU introduced "rebalancing" tariffs on about $3.4 billion of U.S. steel, agricultural and other products.

The two leaders agreed July 25 in Washington to work toward the elimination of tariffs and nontariff barriers on industrial goods traded between the EU and the United States, setting up a working group that kicked off its efforts in September. Trump has held out the threat of imposing auto tariffs on European cars should the trade talks fail to progress.

"We really need tangible progress," Ross said Wednesday. "The president's patience is not unlimited."

The warning highlights the ambiguity of the July pact and the lingering threat of U.S. duties on European cars and auto parts. Such a step would mark a significant escalation of trans-Atlantic tensions after the American metal levies and retaliation by the EU.

The value of EU automotive exports to the United States is about 10 times greater than that of the bloc's steel and aluminum exports combined, meaning European retaliatory duties would target a bigger amount of American exports to Europe.

While Ross said the Trump administration would refrain from imposing new tariffs against the EU as long as their market-opening talks are going "satisfactorily," he made clear the option of American automotive tariffs based on national-security grounds remains.

Ross said he pressed Malmstrom for fast results.

"Our purpose in the meeting was to stress the need for speed and for getting to near-term deliverables, including both tariff relief and standards," Ross said. "This is not meant to be a five-year project. This is meant to be something that was to move quickly and in a cooperative fashion."

On Tuesday after the meeting, Malmstrom said there was "nothing really" notable about it, and an EU official said she used the occasion to reiterate the bloc's objections to the U.S. metals tariffs as well as to a separate set of American duties on Spanish olives.

At a news conference Wednesday, Malmstrom repeated the EU's willingness to seek a "limited" market-opening accord with the United States covering tariffs on industrial goods while saying that "so far, the U.S. has not shown any big interest there, so the ball is in their court."

Part of the complexity of the issue lies in institutional factors. Malmstrom's counterpart in Washington is U.S. Trade Representative Robert Lighthizer, while Ross is responsible for an investigation into whether American imports of automotive goods pose a national-security risk.

Beyond stressing the need to focus on product standards, Ross on Wednesday signaled a desire to tackle European barriers to agricultural trade.

EU officials have insisted that farm products are outside the scope of the July deal between Juncker and Trump (with the exception of a European vow to buy more American soybeans, something market forces are making happen because U.S. shipments to China have been hit by a Chinese tariff imposed as part of an escalating trade conflict between Beijing and Washington).

"We're interested in exploring all sectors where there are protectionist things," Ross said.

Gordon Sondland, the U.S. ambassador to the EU, joined Ross at the briefing and was blunter on the question of farm goods. "Agriculture was always part of the discussion and will need to be part of the discussion to conclude an agreement," Sondland said.

Malmstrom said she would also need to request a mandate from EU member states before any trade negotiations could get underway.

Ross described her remarks as "very discouraging."

"It implies that the U.S. has been the one that is slowing things down. That's simply inaccurate," he said.

Malmstrom has said future trade talks could lead to a "limited trade agreement focused on tariffs on goods only."

She has warned that the EU would break off any negotiations if the United States imposes auto tariffs.

Information for this article was contributed by Jonathan Stearns of Bloomberg News and by Lorne Cook of The Associated Press.

Business on 10/18/2018

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