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Agriculture still a ‘red line’ as Council signs off mandate for EU-US trade talks

Statement clarifies that no agreement can be concluded should new import tariffs be applied on EU exports or current metal tariffs remain in place

The EU Council has given the green light for the European Commission to commence formal discussions with the United States over a trade agreement after adopting negotiating directives at a meeting in Luxembourg today (April 15).

The decision, which specifically states that agriculture is off the table, also clarifies that the previous negotiating directives for the Transatlantic Trade and Investment Partnership (TTIP) agreed in June 2013 “must be considered obsolete and no longer relevant”. 

EU member states signed off two agreements today; the first a trade agreement strictly limited to the elimination of tariffs for industrial goods and excluding agriculture, and the second, a conformity assessment that would have as its objective the removal of non-tariff barriers – making it easier for companies to prove their products meet technical requirements in both markets.

The Commission’s mandate, put forward in January, has now been signed off and builds on the July 2018 Washington statement made by US President Donald Trump and Commission President Jean-Claude Juncker to work towards “zero tariffs, barriers and subsidies”.

But it comes at a time of heightened tensions between the two markets and just last week the US said it will target a number of EU agricultural products if the bloc did not cease in providing so-called “illegal” subsidies to aircraft manufacturer Airbus.

The Council agreement today specifically says that no trade deal will be concluded should new import tariffs be applied to EU goods, or current tariffs on steel and aluminium remain in place.

“The mandate also ensures that the EU will not conclude negotiations with the US as long as the current tariffs on EU exports of steel and aluminium remain in place, and that it would be able to suspend negotiations unilaterally if the US were to impose further trade restrictions against European products,” the Council said.

Agriculture not included

EU Trade Commissioner Cecilia Malmström said today’s announcement was welcome and will go some way to easing trade tensions, but at a press conference added that agriculture is “certainly not” going to be a part of negotiations.

“This is a red line for Europe and you will not find any mention of [agriculture] in our mandate,” she said.

This is not likely to play well in Washington, with members of the US House recently stating in a written letter to US Trade Representative Robert Lighthizer that “an agreement with the EU that does not address trade in agriculture would be, in our eyes, unacceptable.”

It added that such an agreement would face severe difficulty in making it through Congress.

The United States is the leading export destination for EU agri-food exports, with shipments valued at €21.887 billion in the 12 months to November 2018, the latest data available. The US is the second biggest supplier of agri-food products to the EU, behind Brazil, with sales valued at €11.797bn over the same period.

There has been disagreement as to whether agriculture would be included in talks almost since the joint Trump-Juncker statement was made, with Lighthizer and US agriculture secretary Sonny Perdue insisting that the area would be included at the same time as the EU stating that it would not.

Disagreements over agricultural issues such as recognition of the EU’s system of geographical indications for agri-food products, the authorization of genetically modified crops and farming practices such as washing poultry carcasses with chlorine, saw TTIP negotiations stall.

Malmström said that she hoped trade talks can start as soon as possible and be concluded before the end of Juncker’s term as Commission President on October 31.

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