Trade talks are in the forefront of Europe’s priorities this week as a delegation of U.S. business leaders plans to convene in Brussels on Monday, hoping to inch closer to set the new terms of trade with a European Union still dealing with the Brexit defection of the United Kingdom.
As Britain navigates its own divorce from the European Union — including what is already a contentious battle over a new bilateral trade agreement, the Trump administration is moving to re-set trade deals with both parties in the divorce.
President Trump has talked of the opportunity of cutting a new trade deal with a Britain unencumbered by EU regulations and restrictions, while also hinting the EU could be the next target of his tariff-heavy trade strategy to address what Mr. Trump sees as persistent imbalances in transatlantic trade.
“The purpose of this trip is, one, to take stock of not just where the U.S.-EU trade relationship is heading and whether or not a mini-deal can be done by mid-March, but also to look at the next steps in the U.S.-UK relationship and developments in the UK-EU trade relationship,” Myron Brilliant, executive vice president of the U.S. Chamber of Commerce, said last week in a briefing before the Chamber mission.
Chamber members are slated to meet with European Commission officials and EU lawmakers during the trip, including European Commissioner for Trade Phil Hogan. The delegation will also include representatives from 20 corporate leaders with business ties to the UK.
Barely a month after Brexit was formally approved, Mr. Brilliant said both sides are still “feeling out” exactly what they want, with policy tensions between the U.S. and EU complicating progress on trade.
Multiple EU countries have eyed a new digital tax on the revenue of American tech giants like Google, Facebook and Amazon this year. Under this policy, tech companies would face new pressures to pay taxes in all the countries where they do business.
The digital tax legislation has provoked blowback in Washington for months. When France announced a digital tax in July 2019, President Trump blasted French President Emmanuel Macron on Twitter, threatening “substantial reciprocal action” from the U.S.
Washington and Brussels have also clashed over a lengthy dispute involving aircraft subsidies. In October 2019, Mr. Trump announced he would increase tariffs on European aircraft exports in 2020. These tariffs are set to go into effect March 18, yet analysts say a trade agreement may curb the escalation.
These issues among others, Mr. Brilliant said, are expected to impact trade talks but not hinder overall progress. While policy disagreements remain a point of contention, “some progress on the trade front may motivate both sides to tackle these very complex issues,” Mr. Brilliant said.
The US and EU have discussed the possibility of a “mini” trade deal passing in March, yet a specific timeline remains vague.
“A mini deal won’t accomplish everything but it will get us in the right place moving us in the right direction,” Mr. Brilliant said. “The absence of a deal between Europe and the U.S., I think, will hurt Europe’s economic competitiveness, and I also think it creates confusion on the world stage as it relates to global trade.”
The UK and EU are talking tough as British Prime Minister Boris Johnson has set a year-end deadline to redefine trade, investment and regulatory relations with Britain’s former EU partners.
“In pursuit of a deal we will not trade away our sovereignty,” Minister of Brexit Operations Michael Grove told lawmakers in the House of Commons last week.
But EU officials insist Britain cannot expect to get a better deal outside the 27-nation bloc than it enjoyed within it, and many say Mr. Johnson’s timetable for a deal is unrealistic.
“We need a good agreement rather than succumb to calendar pressure,” said France’s Europe Minister Amelie de Montchalin said last week.
EU leaders gave the bloc’s chief negotiator Michel Barnier backing to demand significant concessions from London in the coming talks if Mr. Johnson wants a free-trade deal.
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