US, Europe Announce New Trade Cooperation, But Disputes Persist

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WASHINGTON – The United States and the European Union took a step this week towards a closer alliance by announcing a new partnership for trade and technology, but tensions over various strategic and economic issues still linger in the background.

The creation of the Trade and Technology Council, which aims to establish a united front on sophisticated business practices and technology, is an important test of whether President Biden can deliver on his promise to ease the transatlantic tensions that have mounted. soaring under President Donald J. Trump. The Biden administration has long described Europe as a natural partner in a broader economic and political confrontation with China, and it has criticized the Trump administration for choosing trade fights that have alienated European governments.

But while officials on both sides say transatlantic relations are improving, the US-EU reset has been more difficult than expected.

The inaugural meeting of the Trade and Technology Council in Pittsburgh this week was nearly scuttled after the Biden administration announced it would share cutting-edge underwater technology with Australia, a deal that angered the French government.

Europeans say they are frustrated by the lack of consultation with the Biden administration on a range of issues, including the US withdrawal from Afghanistan. And officials face a tough negotiation in the coming weeks over the metals tariffs Mr. Trump imposed globally in 2018.

The Europeans have said they will impose retaliatory tariffs on other American products from December 1, unless Mr Biden cancels a 25% tax on European steel and a 10% duty on aluminum.

“The EU initially viewed the Biden administration as a ‘breath of fresh air’ but now increasingly wonders how different Biden will be from Trump,” Stephen Olson, senior researcher at the Hinrich Foundation and former trade negotiator American, written in a recent analysis. “The prospects of a US-EU ‘united front’ have been overstated from the start.”

Valdis Dombrovskis, EU trade commissioner, told a roundtable with reporters in Washington on Tuesday that the two sides had done intensive work on the issue. They aimed to reach an agreement in early November to have enough time to avoid European counter-tariffs, he said.

The European Union has been disappointed with the Biden administration’s handling of the Australian submarine deal, Dombrovskis added, but “occasional differences” should not disrupt their strategic alliance.

“Of course, as allies and friends, we don’t always agree on everything, and we’ve seen this in recent weeks,” Dombrovskis said, adding that there had been more commitment of the Biden administration than the Trump administration.

In meetings this week, Secretary of State Antony J. Blinken; Gina Raimondo, the commercial secretary; Katherine Tai, the US Trade Representative; and their European counterparts have pledged to collaborate on a variety of 21st century issues, such as controlling the export of advanced technologies, screening investments against threats to national security, and providing incentives for chipmaking. in Europe and the United States as the semiconductor shortage continues.

Although official documents do not explicitly mention China, the partnership is clearly aimed in part at countering the country’s authoritarian practices. Among other goals, the council pledged to fight against arbitrary and illegal technological surveillance and trade-distorting practices of non-market economies.

U.S. and European officials announced in June an agreement ending a 17-year dispute over aircraft subsidies for Airbus and Boeing.

But a persistent fight over Mr. Trump’s metal tariffs on imports from Europe and elsewhere may prove more difficult to resolve. Mr. Biden is under intense pressure to maintain import barriers from national steelmakers and unions that have backed his campaign.

In a virtual roundtable on Thursday, industry and union leaders said cheap steel produced in Europe could still hurt U.S. industry.

While China is best known for subsidizing its steel industry, European manufacturers have also been the main recipients of government subsidies, giving them an unfair advantage over their American competitors, said Lourenco Goncalves, chief executive of Cleveland-Cliffs Inc. ., an American iron ore mining company. business.

He urged the Biden administration to negotiate from a “position of strength”.

“We need the White House, and we need those on the front lines not to be affected by soft talk, especially from Europeans,” Gonçalves said. “I believe friends are much worse than enemies.”

U.S. officials have proposed to their European counterparts this summer that they transform the current 25 percent tariff on European steel into a so-called tariff rate quota, an arrangement in which higher levels of imports come with higher tariffs. , according to a familiar person. with Discussions, who spoke on condition of anonymity to discuss confidential matters.

The Europeans have called for a more flexible arrangement, and talks are expected to intensify over the next three weeks, the person said.

Thomas kaplan contributed reports.


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