Wed, Apr 17, 2019 - Page 10 News List

EU gives green light to US trade talks

FRAYED RELATIONS:The EU is considering hitting US goods ranging from handbags to helicopters with retaliatory tariffs in a dispute over subsidies to Boeing

Bloomberg

US House of Representatives Speaker Nancy Pelosi applauds while addressing the London School of Economics and Political Science in Britain on Monday.

Photo: Bloomberg

The EU on Monday gave the green light to start trade negotiations with the US, as they seek to rebuild frayed relations a week after threatening each other with billions of US dollars of new tariffs over a 14-year aviation dispute.

EU ministers authorized talks to eliminate tariffs on industrial goods, following through on a political accord reached in July last year between US President Donald Trump and European Commission President Jean-Claude Juncker.

The EU sought the agreement with the US president, in part to avoid levies that Trump had threatened on foreign automobiles and auto parts.

Negotiations are to start amid escalating transatlantic tensions, with the US having accused the EU of not acting in good faith and delaying the start of talks.

Trump’s tariff warning, which would likely be based on the same national-security grounds used for controversial duties last year on foreign steel and aluminum, is likely to weigh heavily on the discussions, with the EU bristling over the idea that it poses a threat to the US.

“We aren’t enemies of the economy here, we aren’t threatening the economy here, we are the closest friends,” European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici said in an interview with Bloomberg last week. “Let’s cool down, let’s not talk about any trade war between us, but in case, we need to be prepared.”

The EU is considering hitting US goods ranging from handbags to helicopters with retaliatory tariffs to the tune of 10.2 billion euros (US$11.5 billion) in a dispute over subsidies to Boeing Co.

The plan follows a US threat to seek US$11 billion in damages through duties on European goods to counter state aid to Airbus SE.

The removal of transatlantic tariffs on industrial goods would expand US exports to the EU by 13 percent and the bloc’s shipments to the US market by 10 percent, the European Commission said in January.

The average tariff on non-farm products is 4.2 percent in the EU and 3.1 percent in the US, the commission said.

Meanwhile, in London on Monday, US House of Representatives Speaker Nancy Pelosi said that the US has missed an opportunity to gain economic leverage over China when it opted to put tariffs on the EU rather than join forces with it.

“I thought one of the biggest opportunities was for the US and the EU to join together — the biggest market in the world, the two combined — and use that leverage in negotiations with the Chinese,” Pelosi told an audience at the London School of Economics and Political Science. “So I wasn’t pleased when the president put tariffs on the EU because you kind of started to weaken that strength vis-a-vis China.”

Additional reporting by Reuters

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