In Sign of Rift Over Trump, EU Parliament Nixes Own Trade Report

Date: March 15, 2019
Source: Bloomberg
MEMA Industry News Editor’s Note: The EU is a critical trading partner for the U.S. and, particularly, for vehicle parts manufacturers. Last December, MEMA commented and testified about its support for the U.S. to strengthen our trading relationship with the EU. MEMA also has argued consistently that the parties must agree to terms related to the current Section 232 tariffs on steel and aluminum and any potential Section 232 tariffs on automobiles and automotive parts. These current and potential tariffs negatively impact vehicle parts suppliers, the largest sector of manufacturing jobs in the United States. Visit the MEMA Trade Resources page for more information about trade talks or contact Ann Wilson or Leigh Merino.
The European Parliament took the rare step of silencing itself on March 14, signaling how splintered views are in Europe about trade policy toward U.S. President Donald Trump.
The European Union assembly in Strasbourg, France, threw out its own draft resolution on trans-Atlantic commercial ties.
The rejection of the non-binding report came minutes after left-of-center political groups pushed through a floor amendment saying EU trade chief Cecilia Malmstrom should be denied the green light for negotiations with the U.S. on cutting industrial tariffs.
Such a demand would have dented a push by Malmstrom to gain permission from EU governments to start the trans-Atlantic talks. As a result, right-of-center members turned against the whole report.
Malmstrom is rushing to begin the market-opening deliberations with the U.S. in a bid to show Trump progress by the EU in enacting a July 2018 political accord that he reached with her boss, European Commission President Jean-Claude Juncker.
The Trump-Juncker deal suspended the threat of U.S. levies on EU cars and auto parts that would be based on the same national-security grounds used by Trump to apply controversial duties last year on foreign steel and aluminum. At the same time, the pact eight months ago expressed a desire to resolve the dispute over the American metal levies, which prompted the European side to retaliate with tit-for-tat duties.
The left-wing forces in the 28-nation Parliament on March 14 linked their call for EU governments to deny Malmstrom a negotiating mandate to a separate amendment they submitted saying the bloc should refrain from beginning trans-Atlantic trade talks until Trump lifts the steel and aluminum tariffs.
Malmstrom and Juncker have made the removal of the U.S. metal duties -- 25 percent on steel and 10 percent on aluminum -- a condition for concluding the planned negotiations with the Trump administration.
In the EU Parliament on March 13, Malmstrom signaled the bloc’s governments were on track to approve within weeks a mandate for negotiations with the U.S. to cut industrial tariffs.
She also reiterated an EU warning of retaliation against any U.S. automotive levies while airing hope such an escalation of trans-Atlantic commercial tensions will be avoided.
“I hope, of course, that wisdom will prevail and that this will not happen so we can continue to work on mutually beneficial outcomes to build this relationship,” Malmstrom said.
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