THE EU SPEEDS UP THE SEARCH FOR AN AGREEMENT IN THE TRADE WAR WITH THE UNITED STATES

Aug 17, 2020 10:57 AM

Relief and haste. Brussels breathed this Thursday before the decision of the United States not to raise the amount of tariffs on European products. "The Commission recognizes the decision of the US not to exacerbate the ongoing dispute," said community sources. The movement avoids the worsening of the commercial shock at a particularly delicate moment for the global economy, but it is far from closing the transatlantic conflict. The annual rates of 7.5 billion dollars (about 6.340 million euros) imposed by the US on imports from the EU in October 2019 are still in force, and each day that passes increases the damage they cause, among others, to the industry aeronautics and the wine and oil sectors.

Donald Trump's four years are running out, but tug of war with his European partners aspire to reach his last day in office. This Thursday it was time to loosen. The United States announced that tariffs will remain intact, with no further increases for now. However, their presence continues to hit the hard European economy. And in Brussels there is a rush to get rid of them. The European Commission took advantage of the pause in the escalation of tensions to ask Washington to put aside the differences and "intensify the efforts to find a negotiated solution." Community sources warn that in the midst of a pandemic, with GDP sinking on both sides of the ocean, there is no margin for the exchange of blows. "The current economic slowdown, and especially its impact on the aviation and aeronautical sector, gives a special urgency to the resolution of this dispute", they point out.

France, one of the countries hardest hit by the tariffs, is increasing pressure on Brussels to act if the White House does not back down. On September 1, the US will add new French and German products to its list and remove other British and Greek products from it, a new affront that has not sat well in Paris. “One thing should be clear to everyone. If the American sanctions are maintained and we do not reach an agreement, the EU must prepare to respond with sanctions ”, said this Thursday the French Minister of Finance, Bruno Le Maire, who insisted that the Twenty-seven comply with the rules of the Organization World Trade.

 

The French wine sector, one of the most sanctioned by the United States, is already facing heavy losses due to the coronavirus this year. "I hope that we can find as soon as possible a definitive solution to the Airbus-Boeing dispute that has lasted for several months and that penalizes our exports to the United States," declared Minister Le Maire. Although the head of the French economy stressed that "there has been no escalation" in the North American sanctions, he expressed his visible discomfort at the news since, he recalled, Airbus has shown its "total agreement" to achieve a solution to the dispute.

Last month, the company announced an agreement with the governments of France and Spain to accept higher interest rates on the repayable loans that both states have granted them for the launch programs of the A350 aircraft. "We believe that the US today has no justification to maintain the tariff sanctions that it has imposed since October 2019," said the delegate minister of Foreign Trade, Franck Riester. Le Maire meanwhile recalled that a few days ago he met with the European Commissioner for Trade, Phil Hogan, "to ask him to speed up the resolution of the conflict and that there be no more sanctions against French products exported to the US". Of course, he said, if the dialogue does not work, we will have to have a strict plan B. "We want this dispute to be settled quickly, but if not, we will have to respond firmly," he insisted. The litigation dates back to 2004, when Spain, France, Germany and the United Kingdom provided public aid to Airbus. Although the EU accuses Washington of doing the same with Boeing, the US denounced that European subsidies hurt the North American aircraft manufacturer. And the WTO agreed with him. To facilitate an exit, Airbus announced a month ago that it was waiving the favorable terms of the loans granted by Spain and France for its A350 aircraft. Brussels then launched a request for the end of the tariffs through its trade commissioner, Phil Hogan. But that gesture still has not arrived, and the bill increases at times: French wine exporters organizations speak of a drop in shipments of 35% and losses of 415 million per year, while the Spanish countryside has left 200 million in seven months .

In this complex environment, with the US taxing 15% on imports of civil aviation goods and 25% on the rest of the products, including cheeses, jellies, wines, spirits and olives, Brussels insists for now in the outstretched hand. And he announces new negotiating efforts by Commissioner Hogan with Robert Lighthizer, the US trade representative, "with a view to finding a solution based on constructive dialogue and mutual benefits rather than conflict." Less than three months before the elections in the United States, the EU does not want to give up the objective of paralyzing tariffs before the elections. On paper, the eventual departure of Donald Trump from the White House, predicted by polls, would pave the way to a solution, but the Twenty-Seven do not want to gamble everything on what the polls say or condemn producers and manufacturers to suffer the tariffs. until the uncertain irruption of a new interlocutor, more friendly to their interests, in 2021.

Source: El País Madrid