France warns EU against rushing into US trade talks

France warns EU against rushing into US trade talks

Paris wants to narrow scope of negotiations on industrial goods and delay until June

France has warned that the EU should not rush into trade talks with President Donald Trump, as Paris seeks guarantees that sensitive economic sectors will be protected in negotiations that it hopes can be delayed until after May’s European Parliament elections.

Jean-Baptiste Lemoyne, the French junior minister responsible for commerce, told the FT that Paris broadly supports EU plans to hammer out a tariff-reduction deal with the US on industrial goods. But he signalled that France was seeking to narrow the scope of the talks and was resisting attempts by other governments to get negotiations under way quickly.

“We have concerns linked to the timing for the adoption of the [EU’s negotiating] mandate,” he said. “Because it seems that the EU has already made enough gestures of goodwill so that we might have some proof of good faith from the side of our American friends.”

The trade talks were conceived last year by Jean-Claude Juncker, the president of the European Commission, and Mr Trump as a way to ease tensions stoked by the US president’s threats to hit imports of European cars with additional duties.

The commission presented a draft negotiating mandate for the tariff talks in January, urging quick approval by governments so as to avoid US accusations of foot-dragging and to help forestall threatened US tariffs on EU cars.

But EU diplomats said that Paris had made clear in talks with other EU member states that it would prefer that the issue was left on ice until after European Parliament elections on May 23-26.

France has made clear to Berlin and other EU capitals that the plans as they stand could provide ammunition for populist parties in May’s EU parliament elections, not least given the likely resistance of the gilets jaunes movement to greater market opening.

Mr Lemoyne said that the EU’s timetable should not be “linked to American threats”. He noted that the EU had already made “gestures of goodwill” since Mr Trump and Mr Juncker negotiated their deal in July, including increased EU imports of US soya beans and liquefied natural gas.

Preparations for the talks have also been complicated by US demands that any deal include EU concessions on agriculture, an idea firmly rejected by Paris, the commission and other EU capitals.

While Berlin and many other governments share Brussels’ view that the mandate should be adopted quickly, EU diplomats said that France was looking increasingly likely to succeed in its bid to stall the adoption until after the May 23-26 vote.

The diplomats said that France and Germany were working on a compromise whereby EU leaders would use a summit meeting in Brussels next week to reaffirm their commitment to the Juncker-Trump plan, while holding off for several more weeks in formally signing off the mandate. Senior officials from national capitals will meet on Wednesday to discuss next steps.

Much of the urgency in other capitals stems from the fact that Mr Trump has until mid-May to decide whether to act on findings from the Department of Commerce that EU cars threaten US national security, and so impose punitive tariffs.

Mr Lemoyne said that the US approach was “to oblige partners to negotiate under threat, and that’s a kind of rupture in the history of transatlantic relations”.

“What changed in 2018 is the American choice of unilateralism, since the US took measures on national security grounds even against its allies over steel and aluminium,” he said

France has also raised a number of substantive issues with the draft mandate. Paris wants guarantees that US companies in energy intensive industries will not be able to exploit an unfair competitive advantage by operating outside of international climate accords.

The government is also resisting suggestions from Brussels that the negotiations include trade in fish.

While Brussels has said that fish needs to be included in the scope of talks for any deal to be compatible with World Trade Organization rules, Mr Lemoyne said that Paris wanted to avoid an “accumulation of anxieties” for an industry already worried about the potential consequences of Brexit.

“It is a discussion that we will have with the member states because not everyone is of our opinion,” Mr Lemoyne said.

EU officials have said that a possible compromise could be to keep fish in scope but to strictly limit any market opening, for example by using tariff-rate quotas.

Mr Lemoyne is also calling for the EU to abrogate dormant plans, conceived at the time of the Obama administration, for a wide-ranging Transatlantic Trade and Investment Partnership with the US, a project that sparked mass protests in France and other EU countries.

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