Stalled EU-US Trade Deal Causing US Exporters to Lose Markets, Panelists Say

An escalating U.S. trade war with Europe would further accelerate the European Union’s efforts to sign free trade deals with other countries, potentially closing off more market access for U.S. exporters, panelists told a House Foreign Affairs Subcommittee June 26.

As the U.S. has been embroiled in trade disputes with Mexico, Canada, China and the EU -- including the Trump administration's recent threat to impose tariffs on EU autos -- the EU has negotiated deals with “dozens of its major trading partners,” said Marjorie Chorlins, the U.S. Chamber of Commerce’s vice president for European affairs. Chorlins pointed to Japan and Canada as examples. “In a number of markets, European exporters actually enjoy better access than U.S. companies,” Chorlins said.

This will continue the longer the U.S. and EU stall on a trade deal, said Daniel Hamilton, a foreign policy professor at Johns Hopkins University. “A trade skirmish with the U.S. would likely accelerate EU efforts to move ahead with free trade agreements with other nations and regions of the world, boxing the United States out of various markets in some cases,” he said. Hamilton said the EU will likely move to complete deals with the Mercosur trade bloc -- which includes Argentina, Brazil, Paraguay, Uruguay, and Venezuela -- as well as “the African Union and other regional groupings in Asia.”

The EU-U.S. tensions are also distracting from both countries' common opposition: China, the panelists said. Both Chorlins and Hamilton said the U.S. and EU agree about the problems arising from China’s “assault on intellectual property” and forced technology transfers, but the looming threat of auto tariffs by the Trump administration and the counter threat of retaliatory tariffs by the EU leaves both unable to exert maximum pressure on China. This includes the U.S.’s goal to gain multilateral support for restrictions on Huawei Technologies, panelists said. “We’re not harnessing the leverage we could have,” Hamilton said.

The panel also advised against the U.S. turning its attention away from a trade deal with Europe and first focusing on a trade deal with the United Kingdom in the case of Brexit. Chorlins called that “nearly impossible” unless the U.S. knows specific details of the U.K.’s departure. U.S. Rep William Keating objected to that notion because of the impact it would have on U.S. agriculture exports. “We’d turn our back on 80 percent of exports with Europe if we just focus on a deal with the U.K.,” he said.