July 2018 marked the first step towards coming to an agreement between US President Trump and European Commission President Jean-Claude Juncker. Since then, US Trade Representative Robert Lighthizer and European Trade Commissioner Cecilia Malström have since met 5 times, the latest being March 6th, to no avail. Both Juncker and Lighthizer have declared the talks have come to a “complete stalemate.” The European Union will only discuss tariffs on industrial goods and refuses the U.S. demands that agriculture be on the table. The American delegation refutes that there can be no trade agreement with Europe without agriculture.
While both parties have differences on the state of the agenda, they also must contend with the time crunch of the tariff demands. Trump is expected to impose tariffs of up to 25 percent on U.S. imports of cars and car parts to which the EU has affirmed will retaliate and cut all talks with the U.S. if imposed.
The discussions between the tariffs on trade are difficult as the EU cannot fully satisfy the American desire to cut the trade deficit as it cannot guarantee, no matter a cut on any tariff or non-tariff barriers, that its citizens and corporations will purchase American goods. On the other hand, China has been able to promise that they will purchase 1.2 trillion worth of goods over the course of 6 years.
The more pressing matter is the EU’s refusal and the U.S.’s insistence on including agriculture in the talks. Agriculture brings in a range of delicate issues including the EU ban on US products on, “genetically modified organisms (GMOs), chlorine-cleaned chickens, and hormone-boosted beef,” and the exclusive geographic identifications that, “restrict the use of common terms like feta cheese or champagne,” to specific European regions. There is also a matter of whether the EU negotiates a free trade agreement with a “non-market economy” such as China.
Lighthizer stated that the pressure from Congress to open the EU market to American farmers is strong enough that a deal without including agriculture would be “dead on arrival.”
It is also important to note that the fundamental differences in governance between the two parties coupled with the tight timeframe make it even more difficult to reach an agreement. If the EU was to include agriculture in the talks, Malström would need to be approved by the European Council with input from European Parliament, before she would have any authority to discuss the possibilities of adding agriculture.
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