EU trade chief believes ‘mini deal’ with US is within reach

EU trade chief believes ‘mini deal’ with US is within reach

Phil Hogan sees opportunity after Washington delays punitive aircraft tariffs

The EU’s chief trade negotiator hopes to broker a “mini deal” with the US as he seeks to curb transatlantic tensions before Washington follows through with an increase in punitive tariffs on Europe’s aircraft sector.

Phil Hogan told the Financial Times that he was optimistic of progress in trade talks after Washington this month limited its retaliation against Brussels in a long-running dispute over aircraft subsidies. The US said it would increase tariffs on EU-made aircraft but delayed their introduction until March 18, while holding back on extra duties on a range of other goods.

The fact that Washington had stayed its hand for now was “sending a signal that the US [is] willing to give this window of opportunity a chance”, Mr Hogan said in an interview.

“They have given us 30 days of suspension of those tariffs on Airbus products which will give us that chance hopefully to make some sort of an agreement,” he said. “We're in a better place than we were some weeks ago . . . With political goodwill on both sides we can do a lot in a short period of time.”

Donald Trump, US president, is focusing more attention on trade relations with the EU after striking a “phase one” agreement with Beijing in December that stopped further escalation of economic hostilities between the two powers. Brussels has warned that Chinese pledges under the deal may violate World Trade Organization rules.

Mr Trump has repeatedly threatened to hit EU car exports with punitive tariffs in order to pressure the bloc into doing a deal on his terms. The EU has sought instead to find common ground on an alternative agenda and is hopeful that the president will be reluctant to stoke tensions that could rattle the US economy in an election year.

Mr Trump met Ursula von der Leyen, European Commission president, in Davos in January and said the two sides would “talk about a big trade deal”.

Mr Hogan has been to the US twice since taking over as trade commissioner in December in a sign of the attempts to reach an agreement. He said an EU-US deal could entail reactivating efforts to reduce tariffs on industrial goods, clearing bureaucratic obstacles to trade in food products and working together to develop international standards for new technologies.

But he said the EU would prioritise “substance over speed” and stressed that the bloc would not water down its standards on food safety or other regulatory norms.

“We're not going to open our regulations in order to allow any reduction of standards,” Mr Hogan said. “I want to say very, very straightforwardly that the European Union is not going to compromise on our food standards, our environment standards or our workplace standards. I've said this from day one and we continue to repeat it.”

The EU trade chief said Brussels wanted to explore possibilities for each side to reduce administrative obstacles to agricultural trade.

The EU has a longstanding grievance that only a handful of its member states can export beef to the US — a legacy of concerns over the spread of mad cow disease. Both EU and US authorities have expressed frustration over the other sides’ reluctance to grant regulatory permissions for trade in shellfish, while eight EU countries are waiting for US authorities to allow imports of their apples and pears.

Mr Hogan is also playing a big role in EU talks with the UK over a post-Brexit trade relationship and with Beijing on an investment treaty that would open up China’s market to European companies.

He said the talks with China had been hampered by the spread of the coronavirus. “Many of the meetings that were scheduled now have had to be cancelled,” he said. “It's not as easy to complete these matters without having a number of face-to-face negotiating sessions.”

On the UK, the Irish commissioner said he was concerned that Britain seemed to be moving away from the political declaration on future relations that Boris Johnson agreed with the EU last year.

Britain has rejected EU demands that it maintain a “level playing field” of common rules — a key part of the political declaration. While acknowledging that the political declaration was legally non-binding, Mr Hogan said it was signed “in good faith”.

“It would be a very bad start to these negotiations if already the United Kingdom are clearly indicating that what is written down on paper doesn't matter,” he said. “I’m disappointed to see that they want to move away from some of the issues that they've already signed up to in the political declaration.”

Jim Brunsden and Alan Beattie in Brussels

Additional reporting by Sam Fleming in Brussels

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