Washington Insider: TransAtlantic Trade Talks Slow, Unsteady

The New York Times says that Robert Lighthizer, the United States Trade Representative held the first of a series of formal discussions with the European Union’s top trade official, Cecilia Malmstrom, recently.The process, the Times said, was slow — in fact, it said that “when it comes to trade negotiations, there is Trump speed, and then there is Brussels speed and reconciling the two will be more laborious and hazardous than expected. The result, NYT concludes, may “expose the world’s biggest trade partnership to further turmoil in the months ahead.”That seems to be the main message after President Trump’s top trade negotiator concluded talks with his European counterpart on Monday, with both signaling that any negotiations would be unlikely to produce the quick wins the President prefers.Following the talks, Lighthizer, called them “constructive” while Malmstrom described them in a tweet as “forward looking.” Progress, though, seems halting, the Times said. “In particular, the European Union appeared to step back from a major concession it made in August.”Malmstrom said then that the bloc was willing to cut tariffs on motor vehicles to zero, if the United States did the same. The president, his bluff called, immediately declared that the concession was inadequate. Now, the European line is that Malmstrom will need the approval of the union’s 28 member states before further talks on the issue.By promising something and then backtracking, Malmstrom seemed to be taking a page from Trump’s own playbook. She also made it clear that Europe will not be as accommodating as Mexico, which agreed to revisions to the North American Free Trade Agreement last month, allowing Trump to claim a victory.“The EU is not going to work that way,” said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington. “They are not going to roll over the way the outgoing Mexican government did. There isn’t going to be an easy win here.”The talks Monday were an attempt to add substance to a promising, but vague, agreement in July between Trump and Jean-Claude Juncker, the president of the European Commission, the European Union’s executive arm and the organization that leads the bloc’s trade negotiations.The two leaders agreed after a meeting at the White House on July 25 to “launch a new phase” that would include “strong trade relations in which both of us will win.” The United States and Europe also promised not to further escalate a trade dispute that already includes tariffs on European steel and aluminum. Europe has retaliated with tariffs against American products like motorcycles, pleasure boats, corn and orange juice.Businesses on both sides of the Atlantic are rooting for negotiators to not only avert a trade war but also eliminate barriers to commerce between the United States and the European Union. Such a deal would benefit both sides, trade experts say, and help them compete better with China, whose trade practices have been criticized by both Washington and Brussels.European leaders have already achieved one of their main goals, which was simply to delay Trump from carrying out his threat to slap the tariffs on car imports. The tone of discourse with the United States has also improved.Trump could, however, easily grow tired of the European Union’s glacial decision-making process and follow through on threats to impose 25 percent tariffs on imported automobiles and car parts. He has taken particular issue with that trade deficit, calling Europe “as bad as China, just smaller.”And there are other points of dispute that could complicate the chances for an agreement. U.S. officials have said they want to discuss food imports, a politically explosive topic in countries like France. Neither side mentioned farm products on Monday.Trade advisers and diplomats have been holding informal talks since Trump and Juncker met in July, but Monday marked the start of formal discussions. Lighthizer said he was optimistic there would be progress to report in November. He and Malmstrom agreed to meet at the end of this month, though they did not specify a date.“It is a very good sign that the European Union and the United States are now engaged in dialogue at the highest level,” said Margaritis Schinas, the Commission’s chief spokesman. “Of course, we’ll need to wait and see that this process crystallizes in results.”Trump’s mercurial presence looms over the talks. Officials and business leaders in Europe are keenly aware that he could undercut progress with a single tweet or comment.After European leaders said late in August that they were willing to eliminate tariffs on vehicles, a major concession, Trump was dismissive. “It’s not good enough,” he told the press.So, we will see. These talks are yet another high stake area where producers see real threats to markets built over long years of investment and which could suffer under at least some of the administration strategies being discussed — and which should be watched closely as the debate intensifies, Washington Insider believes.