[CTC] US reopens door to reviving EU trade talks

[Arthur Stamoulis]

https://www.ft.com/content/7996f226-282a-11e7-9ec8-168383da43b7 <https://www.ft.com/content/7996f226-282a-11e7-9ec8-168383da43b7>
 
US reopens door to reviving EU trade talks
 
Wilbur Ross says EU, Japan and China in competition to show willingness for deal
yesterday
 
by: Shawn Donnan in Washington and Arthur Beesley in Brussels
 
Donald Trump’s top trade official has opened the door to reviving negotiations with the EU but warned the bloc it would be in competition with China and Japan to show willingness to do the first deal with the new US administration.
 
In an interview with the Financial Times, Wilbur Ross, US commerce secretary, called the need to reduce the US’s $146bn transatlantic trade deficit in goods one of his priorities. That deficit is second only to the US’s $347bn one with China. 
 
The billionaire investor is due to host Cecilia Malmström, the EU’s trade commissioner, in Washington on Monday for their first meeting to discuss how to proceed with talks over a Transatlantic Trade and Investment Partnership (TTIP) launched under the Obama administration. Those talks were launched with great fanfare in 2013 but stalled last year amid intense political opposition in the EU and last June’s vote by the UK to leave the bloc. 
 
“The three big [economies] that are the sources of our trade deficit outside of [the North American Free Trade Agreement] are China, Japan and Europe. So it is logical that . . . one should focus on Europe,” Mr Ross told the FT. 
 
The move marks a shift in tone by the Trump administration, which had originally been pushing to strike bilateral deals with EU member countries such as Germany despite that not being allowed under EU rules.
 
But US officials caution that this week’s meeting with the EU is unlikely to lead to a rapid resumption of negotiations with Brussels. Talks would be unlikely to progress significantly before Germany’s election in September. Just as a Trump plan to pursue a bilateral deal with the UK was quickly put on hold because of the questions raised by Brexit, they caution, Washington has doubts about the EU’s “bandwidth” as it focuses on its own negotiations with London. 
 
 
EU officials are similarly cautious about resuming talks with the US that would probably both be difficult and draw public opposition in Europe where Mr Trump is unpopular. “Before taking a decision on how to proceed, we would need to clarify that there is a sufficient level of shared ambition and common ground in finding solutions to difficult issues,” a spokesman for the European Commission said.
 
Mr Ross said despite the regular portrayal of the new administration as a protectionist force in the global economy it was intent on pursuing trade deals with the US’s big economic partners. Although one of Mr Trump’s first acts in office was to pull the US out of the Trans-Pacific Partnership with Japan and 10 other economies, the administration had made a conscious decision not to do the same with TTIP, he said.
 
“Clearly at some point we need to do something with Europe,” he said. “It seems a little weird that a car being shipped from Mexico to Europe pays no tariff as they have a bilateral [agreement with the EU] and a car being shipped from the US pays the full tariff.”
 
But Mr Ross said the US’s first trade priority was renegotiating Nafta, the two decades-old agreement with Canada and Mexico that the president has called a “disaster” for the US economy. He also warned Washington wanted quick wins and was now trying to assess who among China, Japan and the EU was best placed to deliver that.
 
President Trump “is not in favour of just having endless meetings that get nowhere. Our trade deficit is far too serious to be just a debating society. It needs some action,” Mr Ross said. “Since you don’t really have any way to force somebody to negotiate with you the sensible thing would be to figure out which of the big players is most likely to be willing to do a sensible deal.”
 
Mr Ross’s meetings with his EU counterpart on Monday comes just days after he returned from a similar meeting in Japan, with which the Trump administration now wants to pursue a bilateral deal. Washington is also discussing a “100-day plan” on trade with Beijing launched at this month’s summit between Mr Trump and Chinese leader Xi Jinping.
 
The new commerce secretary’s desire to pursue trade agreements highlights the clashing messages on trade coming out of Washington. Mr Trump last week launched a national security investigation on steel imports that seems likely to lead to conflicts with the EU and China. He also has been lashing out at Canada in recent days over a long-running dispute on dairy.
 
In addition, over the weekend the US pushed the world’s finance chiefs to remove language decrying protectionism from a concluding statement at the International Monetary Fund’s spring meetings. At those meetings Steven Mnuchin, the new US Treasury secretary, pushed for the IMF to step up scrutiny of trade “imbalances” in a bid to apply more pressure on surplus countries such as Germany, the EU’s largest member economy.
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