Progress of EU-U.S. Trade Talks
In July 2018 Joint Statement agreement, the EU and the U.S. committed to work towards zero tariffs, zero non-tariff barriers, and zero subsidies on industrial goods other than automobiles. During the talks, both sides also agreed to work towards the following goals:
Seek lower barriers and increased trade in services, chemicals, pharmaceuticals, and medical productsIncrease U.S. exports of soybeans and liquified natural gas to the EUEstablish a dialogue on standards to ease trade, reduce bureaucratic obstacles, and lower costsReform the World Trade Organization (WTO)Resolve the U.S. additional tariffs on steel and aluminum and the EU’s retaliatory tariffs on U.S. goods
On January 30, 2019, the European Commission (EC) published a report on the implementation of the July 2018 Joint Statement, which launched a new phase in EU-U.S. trade relations and prevented an escalation in trade tensions by setting out a positive transatlantic trade agenda. The EC’s report provides a detailed overview of progress made on the goals of the EU-U.S. Joint Statement to date.
Some highlights from the EC report include:
On January 18, 2019, the Commission submitted a proposal to the Council for the launch of negotiations for an agreement with the US on the elimination of tariffs on industrial goods, together with draft negotiating directives for this purpose
The EU has made specific proposals on WTO reform and leveling the playing field (i.e., stronger multilateral disciplines on industrial subsidies)
An agreement has been reached to expand the scope of the U.S.-EU Pharmaceutical GMP Mutual Recognition Agreement (MRA) to include veterinary drugs with an informed decision anticipated by July 2019. This MRA could be expanded to human vaccines and plasma-derived pharmaceuticals no later than 2022
The EU has already implemented several aspects of the July Joint Statement. Most notably, imports of U.S. soya beans by the EU increased by 114% over the 2018/19 marketing year (through January 27, 2019) compared to the same period in 2017/18. With a 77% share of all EU soybean imports (up from 39%), the U.S. is now Europe’s main supplier of soybeans
Additionally, the U.S. soybean industry’s voluntary sustainability certification scheme has been recognized under the EU's Renewable Energy Directive, a decision that, once in force, will open additional commercial opportunities for U.S. exporters
Recent figures have also shown a steep rise in shipments of liquefied natural gas (LNG) from the U.S. in October and November 2018
The EU has also identified a number of areas where voluntary cooperation on regulatory issues with the U.S. could yield quick and substantial resultsHowever, the EU emphasizes that any action by the U.S. to impose tariffs or quotas on EU exports of automobiles and auto parts as a result of the ongoing Section 232 investigation “would be hugely disruptive” to the work outlined above and “would effectively block further progress on key elements.” In particular, such a move would “lead to the suspension of negotiations in industrial tariffs as well as to rebalancing measures in the area of steel and aluminium.”
In addition, the EU states that its proposed negotiating directives on industrial tariffs “envisage that the removal of [Section 232] restrictions on exports of steel and aluminium is a precondition for the conclusion of negotiations.” However, the EU notes that the U.S. has “made no movement” toward lifting those restrictions since July 2018
For more information, visit the European Commission Press Release here.