Monday, 30 Nov 2020

Germany desperately pushes for US-EU trade deal as UK makes progress with Trump

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The outgoing CDU leader said both sides faced the same challenges in their relations with China and should try to tackle them with a united front. And instead of threatening each other with tariffs and trade embargoes, Ms Kramp-Karrenbauer wants negotiators from Brussels and Washington to talk about a free-trade area for the whole West.

She said there was plenty to discuss: “China’s aggressive state capitalism, its handling of currency issues, the question of whether we have a level playing field accessing each other’s market, the protection of intellectual property, the unity of state and party.”

Relations between the EU and US have cooled dramatically in the four years since Donald Trump took over the presidency thanks to his America First policies and fondness for slapping tariffs on nations he feels are taking advantage.

Mr Trump has always seen the EU as America’s leading commercial rival and once branded the bloc “almost as bad as China, just smaller”.

The EU has paid a high price for his America First policies with a bitter trade war with US leading to £5.82billion in tariffs slapped on wine, whiskey and other luxury exports.

Brussels plans to retaliate with £3.11billion worth of tariffs on imports from the US.

It has also vowed to arm itself with potential punitive tariffs against the US and other rivals if they take advantage of World Trade Organisation paralysis and refuse to settle trade disputes.

The European Commission, European Parliament and the European Council, which represents the 27 EU governments, agreed this week on a new enforcement law to protect the bloc’s interests in cases that would normally be handled by the WTO.

The WTO’s Appellate Body, which has acted as a supreme court for international disputes, became paralysed last December after Washington blocked new appointments and left it with too few adjudicators to make new rulings.

The move allows any WTO member unhappy with the finding of a lower-level WTO panel to launch an appeal into a void, leaving a case in legal limbo.

Under its plan, the EU would be able to take retaliatory action based on a WTO panel finding if another country tried to block a final settlement.

Brussels has agreed an interim appeals mechanism that would produce a final adjudication with a series of trade partners, including Australia, Canada and China, but not the US.

The new EU law will extend to possible trade measures for services and for intellectual property rights and could also be used in disputes over bilateral trade agreements, such as the post-Brexit trade deal the EU is trying to strike with Britain.

The European Commission has also committed to put forward by the end of 2021 new rules to protect the EU against “coercive” action by others.

Brussels trade commissioner Valdis Dombrovskis made it clear if negotiations couldn’t solve trade disputes, the EU would definitely act.

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He said: “Our trade and investment relationship remains the largest and most important in the world.

“It’s important to continue to engage and to continue to develop our transatlantic relations because when the EU and US works together we can also be a force for good in the world.

“But we have also been clear that when the US is taking unilateral steps, the EU is going to respond in a proportionate way.

“So although we do not intend to escalate the situation, we have to defend ourselves.”

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