Farm Ireland

Monday 19 February 2018

EU moves to mend trade bridges with US

Britain's Prime Minister Theresa May, US President Donald Trump and German Chancellor Angela Merkel at the G7 meeting last week
Britain's Prime Minister Theresa May, US President Donald Trump and German Chancellor Angela Merkel at the G7 meeting last week

Sarah Collins

The EU is hoping to mend strained trade relations with the US by penning a "joint action plan" with the Trump administration in the coming weeks.

The idea is to "intensify trade cooperation" between the world's two largest economic blocs and solve irritants such as excess bureaucracy in the food and car sectors, EU diplomats said.

They also expressed a "common interest" in working with other countries to tackle "unfair trade practices", an EU source said.

EU-US trade relations have frayed since President Donald Trump was elected last November on a protectionist ticket.

He has since pledged to investigate the US trade deficit in goods with China and several EU countries, including Germany and Ireland.

In a meeting with the EU's top officials last week, Mr Trump was said to have complained about Germany's high trade surplus. Its annual surplus of goods with the rest of the world is over eight per cent of GDP, two points above the EU's upper limit. High trade surpluses can indicate "imbalances" such as excess savings and low investment.

European Commission president Jean-Claude Juncker said that Mr Trump was "not aggressive" about the surplus in the meeting, but said that he warned the US president against looking at EU countries in isolation. "The US cannot compare their trade situation with individual member states of the European Union, they have to compare their performances with the global performances of the European Union," Mr Juncker said at a G7 summit in Italy last Friday.

"I made it clear that the Commission is in charge of dealing with trade issues, and not the member states." Talks on a wide-ranging EU-US trade deal, known as the transatlantic trade and investment partnership (TTIP), have been on ice since Mr Trump's election.

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The plan had also flagged under sustained opposition by climate and transparency activists, who said it unfairly benefitted multi-nationals and could lower EU health and safety standards.

It is unclear whether the new action plan will seek to revive TTIP, one of the EU's new-style trade deals focusing on goods, services and regulatory standards, which began in 2013.

A team of European Commission officials will meet their counterparts in the Trump administration "in the next few weeks", said Mr Juncker, to flesh out the plan.

"We emphasised that we should have free, but fair competition," Mr Juncker said after the meeting with Mr Trump last Thursday.

"We felt there was too much divergence in our analysis and in our measures - too much divergence between the major economic blocs."

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