Tuesday, 25 June, 2019

Brussels: EU countries approve launch of United States trade talks

Airbus says US sanctions on its aircraft would have no legal basis EU prepares to retaliate against U.S. tariff threat
Deanna Wagner | 13 April, 2019, 18:38

The European Commission, which coordinates trade policy for the 28 member European Union, had sought clearance for two negotiating mandates - one to cut tariffs on industrial goods, the other to make it easier for companies to show their products meet EU or us standards.

The EU is considering slapping more than €19 billion in fresh tariffs against the U.S. in response to subsidies provided to planemaker Boeing, EU and European officials have told EURACTIV. "It will soon stop!"

"This case has been in litigation for 14 years, and the time has come for action", said U.S. Trade Representative Robert Lighthizer.

The EU and the United States have fought for over a decade over mutual claims of illegal aid to plane giants Boeing and Airbus.

Berlin strongly wants the limited deal in order to placate Trump and avoid U.S. auto tariffs that would punish Germany's cherished exports, a prospect Chancellor Angela Merkel has labelled "frightening".

"Jennifer Hillman, a former US trade official who also served to the WTO's appellate body", said the USA government generally would announce that the goal list quietly, perhaps through a notice in the Federal Register.

"The EU is confident that the level of countermeasures on which the notice is based is greatly exaggerated", the spokesman said.

The list of US goods on the commission's draft retaliation list in the Boeing-aid case also includes video-game consoles, fitness equipment, casino game tables, tobacco, vodka, orange juice and a range of foods including chocolate, ketchup and frozen lobster.

Trump had sparked outrage in Europe past year by imposing steep duties on steel and aluminum and threatening new ones on autos.

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The threat comes amid a battle between Airbus and US-based Boeing, which have accused each other of benefiting from unfair government subsidies.

"When I see the situation global growth is in, I don't think we can afford to have a trade conflict, even if only on the specific issues of the aircraft industry in the United States and Europe", he said.

The EU responded with tariffs about 2.8 billion euros' worth ($3.4 billion) of US steel, agricultural and other products, from Harley Davidson cycles to lemon juice.

Airbus shares closed down almost 2 percent, while Boeing dropped 1.4 percent.

"Get ready for more tit-for-tat scrapping to follow", said John Woolfitt of London brokerage Atlantic Markets. The United States is a major market for Volkswagen, Mercedes maker Daimler and BMW.

Moody's said on Tuesday potential US tariffs on imported autos and parts represented a significant risk to global growth and would hinder economic momentum in Germany, Japan and Korea.

This move, which is being monitored by relevant sectors in the food agri supply chain, would see trade tensions between the United States and the European Union intensify further.

Trade analysts say it isn't unusual for countries to present a tariff target list before the WTO arbitrator sets actual parameters.