Valdis Dombrovskis, who was officially appointed EU trade commissioner on Wednesday, told the Financial Times that repairing the transatlantic relationship was a top priority and that the US should withdraw its Airbus tariffs as a confidence-building measure.
The US imposed additional tariffs on EU products valued at $ 7.5 billion last year, ranging from French wines to Italian cheeses to German machine tools, after being granted the right to do so by the World Trade Organization. The tariffs reacted to the illegal subsidies for the European aircraft manufacturer Airbus, confirmed by the WTO.
Brussels has been waiting with growing impatience for a final WTO ruling on its right to hit US products in its parallel complaint against state aid to Boeing. The decision is expected to be made on October 15th. EU officials expect the bloc to be granted rights of retaliation on US goods valued at around $ 4 billion.
While this is less than the volume allocated to the US, EU officials believe it will still be enough to take an economic blow.
Brussels has shortlisted an eclectic mix of US products for punitive tariffs, including planes, excavators, casino tables and fitness equipment, as well as sensitive farms like blueberries grown in the US electoral state of Florida.
It is clear that if we do not see a clear move on the US side in withdrawing or at least suspending its tariffs, it will not require much delay on our part
Should US tariffs be withdrawn or suspended, Dombrovskis said the EU would keep its hand and the two parties could focus on reaching a long-term agreement on aircraft subsidies.
“If the US does not withdraw its tariffs, then of course we have no choice but to introduce our tariffs,” he said. “In any case, it is clear: If we do not see a clear move on the US side in withdrawing or at least suspending their tariffs, this will not require a great delay on our part.”
Brussels has identified the Airbus-Boeing dispute settlement as key to unlocking a more productive trade talks with the US. Aside from this dispute, President Donald Trump has imposed additional tariffs on EU steel and repeatedly threatened to target the automotive sector.
Mr Dombrovksis has taken over these efforts amid the stream after his predecessor, Irishman Phil Hogan, resigned in August for alleged violations of Covid lockdown rules. Dombrovskis, a former Latvian Prime Minister who steered his country through an international bailout, is one of the Executive Vice-Presidents of the EU Commission with far-reaching economic policy tasks.
One of Mr Hogan’s final acts was to seal the first EU-US tariff reduction agreement in 20 years, in particular the removal of tariffs on US lobsters.
Mr Dombrovskis praised the agreement, but said that given the different negotiating goals of the two sides, there was little room for such “mini-deals” on tariffs. The European nations authorized the Commission to negotiate an agreement on free trade in manufactured goods with the US, while it was clear to the US Congress that any agreement would have to include agriculture – a red line for many EU member states.
“I wouldn’t expect any new mini deals like the Hummer deal because our negotiating mandates don’t match,” said Dombrovskis. “Our mandate clearly excludes agriculture and the US clearly wants to discuss agriculture.”
However, he said the opportunities for collaboration beyond the Airbus-Boeing case are wide-ranging, citing ongoing negotiations to smooth out product compliance reviews. Brussels has also presented Washington with the idea of having an “EU-US trade and technology council” to discuss standards for new technologies such as artificial intelligence.
Mr Dombrovskis said he wanted to work together to resolve “purely legal or administrative issues” that are hindering trade in some EU and US agricultural products such as European beef – and stressed that this would not mean lowering food safety standards.
“We have had a constructive collaboration on shellfish lately – both sides are currently finalizing the final steps before trade can resume,” he said. “I hope we can intensify our cooperation on other similar issues.”
A central goal of Mr Dombrovskis’ mandate, which runs until the end of 2024, will be to forge close transatlantic cooperation in reforming and ultimately rescuing the WTO.
“This move to unilateralism and this more protectionist approach was clearly something that came with the Trump administration,” he said, while refusing to speculate on what a Biden presidency might bring.
“But we will definitely get involved. . . and try to bring the US government back into the framework of multilateralism. ”
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