EU trade ministers will meet on Monday to plan a “reboot” of transatlantic relations in the post Trump-era, mapping out a co-operative agenda even as the bloc prepares to hit American products with fresh tariffs.
“We want to quickly fix ongoing disputes we have with the US, so we can move on and reboot our transatlantic co-operation,” Valdis Dombrovskis, the EU’s trade commissioner, told the Financial Times. “We have a very positive agenda we can build on with our American partners, with many areas of common interest.”
The European Commission is set this week to target almost $4bn worth of US goods, including tractors, groundnuts and gym equipment, with additional import duties as part of the two side’s 16-year-old dispute over state aid to Airbus and Boeing.
But Brussels has emphasised that it hopes the retaliatory move will pave the way to a settlement of the long-running spat, after the US raised tariffs on European products last year.
The bloc’s trade ministers will hold a virtual meeting on Monday to try to work out how to build a common transatlantic front with the Biden administration on strategic challenges such as reining in China’s trade practices and tackling the Covid-19 pandemic.
EU diplomats underline the urgency of turning the page on four years marked by recurrent bouts of transatlantic trade tension. President Donald Trump’s administration imposed punitive tariffs on EU steel on national security grounds, repeatedly threatened Europe’s car sector, and succeeded in partly shutting down the World Trade Organization’s system for settling disputes.
Mr Trump’s appetite for hitting out with tariffs in a bid to extract unilateral concessions placed further strain on an international trading system already struggling to contain China’s model of state-backed capitalism.
Brussels is aware that some core objectives of president-elect Joe Biden’s trade policy are unlikely to differ substantially from Mr Trump’s. On the campaign trail, Mr Biden promised to boost US manufacturing, to strengthen rules forcing federal agencies to buy US goods and to impose extra taxes on companies looking to take their supply chains offshore.
Sources of tension will persist after inauguration day. EU diplomats acknowledge that extensive work will be needed to solve the aircraft dispute, and that potential flashpoints are looming, not least because of the determination of France and some other EU nations to hit US tech giants with higher taxes.
But the strong hope within the EU is that, under a Biden presidency, the union will be treated as a partner rather than a threat, and that common cause can be found in defending the international system of rules-based trade.
A return to the “old normal” of life before the Trump presidency “is not on the cards” said one EU diplomat. “But at the same time the US will remain an indispensable trade partner for the EU. The same is true the other way around.”
EU officials emphasise that the bloc wants the US to help save the WTO and the system it represents from terminal decline. For the moment, the WTO does not even have a director-general, with the Trump administration refusing to join other WTO members in backing Nigeria’s Ngozi Okonjo-Iweala for the job.
One focus of ministers’ discussion on Monday will be on co-operation in dealing with China. The EU shares US concerns about technology-transfer conditions placed on companies operating in China and the advantages enjoyed by the country’s state-owned enterprises.
While there was some joint EU-US work during Mr Trump’s tenure, notably the crafting of a trilateral position with Japan on how the WTO should tackle industrial subsidies, Brussels sees the potential to go much further.
EU officials said one promising, and vital, avenue for co-operation was on the protection of emerging technologies and related implications for national security. Both the EU and US have grappled with security concerns around dependence on Chinese telecoms company Huawei for 5G networks, and have sought to manage the risks posed by takeovers of cutting-edge companies.
There have been signals from the Biden campaign that it foresees benefits from co-operation in this area too, with campaign officials citing the need to strengthen co-ordination with Europe on screening of foreign investments and intelligence sharing on potential commercial threats. Mr Dombrovskis had already been exploring with the Trump administration the idea of an EU-US trade and technology council to manage some of this work.
A related priority is to find common cause with the US on modernising trade rules. That would include work at the WTO on ecommerce, as well as fashioning a stable solution for companies to transfer data between the EU and the US.
Luisa Santos, deputy director-general at lobby group BusinessEurope, said the “most pressing, urgent issue” for transatlantic trade relations was solving the Airbus-Boeing dispute, but that the second was data flows. Previous EU efforts to negotiate data-sharing agreements with the US have withered under scrutiny from the European Court of Justice, which found violations of the bloc’s strict privacy laws.
“A good balance between data privacy and data sharing is essential for transatlantic supply chains,” she said.
Mr Dombrovskis said it was a period of extraordinary “turbulence”, adding: “So we need to keep our friends close and maintain those alliances that really count.”