U.S., EU Agree to Pursue Trade Liberalization Measures
The U.S. and the European Union announced July 25 “a new phase” in their bilateral relationship that will feature “strong trade relations in which both [sides] will win.” The agreement appears to ease trade tensions that have escalated in recent months as the two sides have raised tariffs on each other’s products.
According to a joint statement, the U.S. and EU have agreed to work toward the following.
- zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods
- lower barriers and increased trade in services, chemicals, pharmaceuticals, and medical products
- greater U.S. exports to the EU of soybeans and liquefied natural gas
- a dialogue on standards to ease trade, reduce bureaucratic obstacles, and lower costs
- working with like-minded partners to reform the World Trade Organization and address unfair trading practices such as intellectual property theft, forced technology transfer, industrial subsidies, distortions created by state-owned enterprises, and overcapacity
- resolution of the U.S. additional tariffs on steel and aluminum and the EU’s retaliatory tariffs on U.S. goods
An executive working group will be set up immediately to advance these efforts and identify short-term measures to facilitate commercial exchanges and assess existing tariff measures.
According to the statement, while these efforts are underway neither side will “go against the spirit of this agreement, unless either party terminates the negotiations.” European Commission President Jean-Claude Juncker said this means “as long as we are negotiations … we will hold off further tariffs and we will reassess existing tariffs on steel and aluminum.” This appears to mean the U.S. would not increase tariffs on automobiles and auto parts from the EU if an ongoing Section 232 investigation finds that imports are jeopardizing U.S. national security.