EU, US Officials Consider Approaches, Objectives for Trade Negotiating Outcomes

25 October 2018

Three months after US and EU leaders agreed to launch an “Executive Working Group” to tackle a series of trade issues, questions over how future talks will proceed and what those efforts will cover substantively remain, with trade officials offering differing public assessments in recent weeks.

Reports indicated that the working group was due to meet in Washington this week, though details of the meeting were not made public by the time Bridges went to press. The Executive Working Group was launched in July by US President Donald Trump and European Commission President Jean-Claude Juncker, who said that this working group would tackle a multi-pronged agenda covering select trade topics. 

The two leaders had met in Washington in a bid to assuage trade tensions that had been on the rise between the trans-Atlantic partners over the past year. (See Bridges Weekly, 26 July 2018

Joint statement implementation

Since last July, subsequent meetings of EU and US trade officials have been held to discuss the implementation of the Juncker-Trump joint statement, which had said that the two sides could aim to eliminate tariffs, non-tariff barriers, and subsidies on industrial goods, minus cars, along with seeking to agree terms to boost trade in soybeans, chemicals, pharmaceuticals and medical goods, and services. Talks were also due to cover standards, as well as examine how to boost EU imports of US-produced liquefied natural gas (LNG).

Since then, EU officials have noted that LNG imports from their North American partner have already been on the rise, while suggesting that US rules requiring regulatory approval for shipping LNG abroad are posing challenges for increasing that trade to its full potential.

“The growing exports of US liquefied natural gas, if priced competitively, could play an increasing and strategic role in EU gas supply; but the US needs to play its role in doing away with red tape restrictions on liquefied natural gas exports,” said Juncker in August.

How much such efforts will harvest from past attempts to clinch an EU-US trade accord, most recently under the Trans-Atlantic Trade and Investment Partnership (TTIP) process launched during the previous administration of US President Barack Obama, also remains to be seen. Negotiators held well over a dozen TTIP negotiating rounds, but ultimately had to put their work on hold after the results of the US election, pending clarity from the new administration on its approach to the EU trading relationship. (See Bridges Weekly, 13 October 2016)

US, EU officials lay out respective goals

On 16 October, US Trade Representative (USTR) Robert Lighthizer submitted letters to congressional leaders regarding plans to launch formal trade negotiations with the European Union, as well as with the United Kingdom and Japan, which is the first step under US trade law for beginning such talks formally. Lighthizer’s team will next need to submit negotiating objectives to Congress, a step that must take place one full month before trade talks officially begin.

“Our aim in negotiations with the EU is to address both tariff and non-tariff barriers and to achieve fairer, more balanced trade in a manner consistent with the objectives that Congress has set out in section 102 of the Trade Priorities and Accountability Act,” the letter says. The legislation that the letter refers to is the 2015 version of Trade Promotion Authority, which was extended this year through 2021.

The letter also envisages the possibility of conducting trade talks with Brussels in multiple stages, while stressing that this decision would be made only after the administration has held the necessary consultations with US lawmakers. 

Further details in the US notification were scant, however, and recent statements from EU and US officials have suggested that Brussels and Washington are not yet on the same page regarding how and when such a process should proceed, along with what should be included in a formal trade agreement and what should be dealt with via other channels.

“We took stock on where we were after the meeting where we both participated in the White House between President Juncker and President Trump, so it was a general stocktaking exercise,” said EU Trade Commissioner Cecilia Malmström during a press conference earlier this month, describing her recent meetings with US Commerce Secretary Wilbur Ross. The press conference was held on 17 October, after the USTR notifications were sent to Congress. 

“We have not started negotiating yet, we have asked and said that we are prepared – several times – to start the scoping exercise on a limited agreement focused on industrial goods, on tariffs there. So far the US has not shown any big interest there, so the ball is in their court,” said Malmström at the time. 

“As you know, if we were to start a negotiation, which was expressed in the joint conclusions by the two presidents, there would first need to be a scoping exercise, and then I would have to ask for a mandate from the member states. So we haven’t started negotiating yet, but if this is a first step taken by the US, then we are happy to continue those discussions,” she continued. 

On soybeans, LNG, and regulatory cooperation, the EU trade chief said that the two sides are starting to “exchange ideas on what can be done” and the process is “quite advanced,” while suggesting that these items would fall outside the ambit of a trade accord. The latter would be “more limited” and focus on industrial tariffs, she said. 

Separately, Ross told reporters last week that he hopes US-EU negotiations proceed swiftly and lead to “tangible” outcomes, while also saying that standards should be discussed together with industrial tariffs. He also suggested that the Trump administration would not be comfortable with talks that drag on too long, according to comments reported by Bloomberg. 

ICTSD reporting; “U.S., EU Trade Teams Seek Fast Results and Big Savings,” THE WALL STREET JOURNAL, 21 October 2018; “Trans-Atlantic Trade Truced Tested by U.S. Official’s Outburst,” BLOOMBERG, 17 October 2018.

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