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Shift in EU-US rhetoric, but trade policy unchanged – for now

No commitment to remove steel tariffs

The meeting between US President Donald Trump and EU Commission President Jean-Claude Juncker in Washington on Wednesday (July 25) has led to an abrupt change in the mood music in the Transatlantic dialogue. But there is no guarantee at present that it will ultimately lead to anything more substantial than that.

The EU-US joint statement at the end of the two Presidents’ meeting committed the two sides to a surprisingly ambitious agenda of trade liberalisation. The most eye-catching proposal – talks to remove all tariffs and trade barriers for non-auto industrial goods – marks a significant shift in position from the punitive tariffs and counter-tariffs in which the two sides have been dealing of late.

It should be noted, however, that the US’s controversial steel and aluminium tariffs remain in place for now, as do the EU’s counter-tariffs - with no actual commitment to remove them

Moreover, it is clear that a plan to ‘work toward’ such liberalisation initiatives is much more easily delivered than are concrete pledges to actually put them into effect.

The ‘joint agenda’ for reform will also include ‘a close dialogue on standards’. Such a dialogue would pull the discussions back to the heart of the issues which did so much to derail the (first) TTIP negotiations between the two sides – including perennial agri-food irritants such as genetically modified (GM) crops, hormones in beef, and chemically-treated poultrymeat.

Meanwhile, the specific focus on soyabeans in the post-summit press conference between Trump and Juncker has caused some confusion.

The US is already a major exporter of soyabeans to the EU; in 2017 it exported over 5 million tonnes, in trade worth some €1.8 billion. It already has duty-free access to the EU market for soyabeans, with the only significant barrier to trade being the fact that some of the GM soya varieties produced in the US are not (yet) authorised by the EU.

Juncker’s statement that “the European Union can import more soyabeans” is therefore no more than a simple statement of fact – and a convenient one for President Trump, given the collapse in US soybean prices since China’s imposition of a 25% tariff on imports of US beans.

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