US officials on Tuesday announced that negotiations for separate trade agreements with the UK, the EU and Japan as part of efforts by US President Donald Trump’s administration to rebalance global commerce.
US Trade Representative Robert Lighthizer said the administration notified the US Congress of its intent to negotiate separate trade agreements with the three nations.
“We are committed to concluding these negotiations with timely and substantive results for American workers, farmers, ranchers and businesses,” Lighthizer said in a statement.
The move follows the Trump administration’s renegotiation of the North American Free Trade Agreement with Canada and Mexico, and its push to correct what Trump maintains is an unbalanced trade picture.
In the notifications to Congress on Japan and the EU, Lighthizer said that there were “chronic US trade imbalances,” and that US exporters have long been “challenged” by tariff and non-tariff barriers in Japan and in Europe.
The goal is to achieve “fairer, more balanced” trade with the US’ partners, Lighthizer said.
The US would seek a trade agreement with Britain as soon as it exits the EU next year, Lighthizer said.
The letter to Congress said that Washington would aim to address tariff and non-tariff barriers and achieve “free, fair and reciprocal trade” with the UK.
Trump has been playing hardball with US trading partners, using tariffs and threats in an effort to boost US exports and curb the longstanding deficit in merchandise trade, despite warnings from many lawmakers and the IMF.
Trump had in May ordered the US Department of Commerce to investigate the possibility of imposing tariffs of up to 25 percent on foreign autos and auto parts, a prospect that alarmed the industry and could have serious repercussions for Japan and Europe.
“We need to work together to de-escalate and resolve the current trade disputes,” IMF managing director Christine Lagarde said at the IMF and World Bank annual meetings in Nusa Dua, Indonesia, last week.
Trump has levied or threatened tariffs on goods from economies around the world, notably China, but also on traditional allies including the EU.
More tariffs and their countermeasures “could lead to a broader tightening of financial conditions, with negative implications for the global economy and financial stability,” the IMF said.
The new talks, if successful, would address trade with Europe and Japan, but leave the tougher challenge of China, with which the US had a deficit of US$376 billion last year, excluding services, out of a total goods deficit with the world of US$832 billion.
Tensions with Brussels relaxed in late July when Trump and European Commission President Jean-Claude Juncker vowed to work together to eliminate tariffs, trade barriers and industrial subsidies — excluding the automotive sector.
A working group led by Lighthizer and European Commissioner for Trade Cecilia Malmstroem has been tasked to collaborate on the feasibility and contours of such an agreement.
However, both sides have indicated that they are far from resolving their differences.
The proposed Transatlantic Trade and Investment Partnership has been at a standstill since Trump came to office, with European countries especially fearful of US imports of beef fed growth hormones and genetically modified organisms.
Initial negotiations took place between Lighthizer and Japanese Minister of Economy, Trade and Industry Toshimitsu Motegi in August, but Tokyo is still seeking to bring the US into the fold of a multilateral agreement such as the Trans-Pacific Partnership — which Trump earlier pulled out of.
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