LDN - Business

EU debates when to start trade talks with Trump

[February 22, 2019] By Philip Blenkinsop

BUCHAREST (Reuters) - European Union ministers began debating on Friday when to start trade negotiations with the United States, aware that U.S. President Donald Trump may impose punitive tariffs on EU car imports if they wait too long.

The European Commission has asked the EU's 28 countries to approve two negotiating mandates so that formal talks can begin.

Diplomats say Germany, whose exports of cars and parts to the United States are worth more than half the EU total, wants to press ahead. But France, with very few U.S. car exports, is reluctant to move before the European Parliament election in May, convinced that dealing with Trump is not a vote winner.

"We need to start negotiating," EU Trade Commissioner Cecilia Malmstrom told reporters before Friday's meeting.

It made sense to wait for a vote in the European Parliament on the issue in March, then move quickly, she said -- a matter of weeks, not months.

French junior minister Jean-Baptiste Lemoyne agreed on waiting for the non-binding parliament vote but did not share Malmstrom's sense of urgency.

"The leaders will meet later. For the moment, it's a first political discussion. It's clear there could be more to come," he said.

German Economy Minister Peter Altmaier said he was not aiming to "rush something through". His Austrian counterpart Margarete Schramboeck was more forthright.

"I expect from all the countries to give a mandate to the Commission... so that the Commission can negotiate and not hold back because my car industry, maybe in France or one other country, is not as affected as much as in another country."

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U.S. President Donald Trump speaks about trade relations with President of the European Commission Jean-Claude Juncker in the Rose Garden of the White House in Washington, U.S., July 25, 2018. REUTERS/Joshua Roberts

The United States and Europe ended a stand-off of several months last July, when Trump agreed to hold off on car tariffs while the two sides looked to improve trade ties.

They committed, among other things, to work toward removing tariffs on "non-auto industrial goods".

The EU is looking now to start negotiations on tariff reductions, possibly including cars, as well as a separate set of talks on making it easier for companies to clear their products for sale on both sides of the Atlantic.

Industrial good tariffs are already low, at around 4 percent. However, the Commission has said that removing them would boost EU exports to the United States by 8 percent and U.S. exports to the European Union by 9 percent by 2033.

The United States has a wide-ranging wish list, including comprehensive agricultural market access. EU unwillingness to include farm products could set it on a collision course with Washington.

Friday's gathering is billed as "informal", meaning no official decision will be taken. Malmstrom said this could occur at any subsequent formal meeting of national ministers.

(Reporting by Philip Blenkinsop; additional reporting by Foo Yun Chee in Brussels; editing by Hugh Lawson, Larry King)

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