Trade Talks With Europe Expected to Show Little Progress This Year

The European Union and the U.S. have not formally begun the trade talks first agreed to last July, as the 28-member bloc still does not have a mandate to negotiate. Given that, many observers are doubtful negotiations could make substantial progress this year.

There have been talks on issues other than tariffs, which doesn't require a political mandate. Germany's ambassador to the U.S., Emily Haber, said the talks so far are going well, as they talk about regulatory harmonization for medical devices, pharmaceuticals and cybersecurity. "On trade, we're united, we want to move forward with you," she said. Reports from Europe say the countries are not united, and that's what's holding up the mandate. One sticking point is how to address the abandoned Transatlantic Trade and Investment Partnership negotiations.

Clete Willems, deputy director of the National Economic Council, said he didn't want to predict how far the EU and the U.S. will get in trade talks this year. "Certainly, we're not trying to replicate TTIP," he said, referring to the trade talks during the Obama administration with the EU. "We don't want the same result."

The EU talks -- and the Section 232 tariffs on autos they are supposed to delay -- were the hottest topic at the U.S. Chamber of Commerce's annual Transatlantic Business Works Summit April 8. Industry representatives talked about the disappointments of TTIP and how to avoid a repeat. David Talbot, senior director of international government affairs for pharmaceutical giant Eli Lilly, said the only positive thing that came out of TTIP was some recognition of common standards between the Food and Drug Administration and the European equivalent agency. Talbot said free trade advocates need to start addressing what they know will be controversial topics with American and European voters "before we start any of these discussions, or else we'll get bogged down again."

"Reductions in tariffs is very good for everyone," Spain's Ambassador to the U.S. Santiago Cabanas Ansorena said. "We should stop the current trend of protectionist measures." He said the imposition of antidumping duties on Spanish olives does create a political issue that complicates the talks.

The scope of the EU-U.S. economic relationship was highlighted at the summit; overall, U.S. merchandise exports to the EU were $319 billion in 2018, and EU exports to the U.S were about $487 billion. European car companies exported about 60 percent of their U.S. production. The U.S. buys 29 percent of EU auto exports and the EU buys 20 percent of U.S. auto exports; total two-way auto and auto parts trade is 10 percent of all trade. The top four U.S. goods exports to the EU are transportation equipment (including aerospace), chemicals, computers and electronics, and manufacturing machinery.

While most panelists talked about the payoff of regulatory harmonization, UPS Vice President for Global Public Affairs Dontai Smalls suggested uniform de minimis is less important than arranging for trade facilitation through a future agreement. "Immediate release of goods somewhat separate from national collection of duties and taxes" is an express carrier priority, he said.