EU Pursues Trade Talks With Australia in Wake of U.S. Tariffs
June 18 2018 - 12:45PM
Dow Jones News
By Emre Peker
BRUSSELS -- The European Union and Australia launched free-trade
negotiations Monday, part of a push by U.S. allies world-wide to
bolster economic links and counter fallout from President Donald
Trump's "America First" policies.
European Trade Commissioner Cecilia Malmström arrived this week
in Canberra, Australia, advancing the EU's global trade offensive
after the Group of Seven summit in Canada that left other Western
leaders dismayed about Mr. Trump's protectionist measures.
"It is a challenging time, so it is really good to see that
Australia shares our commitment to a positive trade agenda, and to
the idea that good trade agreements are win-win agreements," Ms.
Malmström said Monday in a joint briefing with Australian Prime
Minister Malcolm Turnbull and Trade Minister Steven Ciobo. "It
sends a very strong political signal that we're launching these
negotiations today."
The EU's trade chief will next meet counterparts in New Zealand
on Thursday to launch trade talks with another U.S. ally. Brussels
wants to fill the global vacuum in the wake of Washington's
withdrawal from its traditional role as free-trade champion.
Yet the EU's ambitions are hampered by international and
internal pitfalls testing the bloc while its longstanding partner
is moving to punish Europe.
The White House placed tariffs of 25% on steel and 10% on
aluminum exports from the EU as of June 1, after three months of
intense negotiations. The president accuses the EU of being unfair
to the U.S. and, despite a gathering trade war, is now exploring
tariffs on cars that would hit Europe hard.
The EU has pursued deeper trade links with other partners in the
face of such challenges. The European Commission -- the EU's
executive -- last year enacted a free-trade deal with Canada that
was agreed to in 2016, and clinched tariff-slashing agreements over
the past year with Japan and Mexico. Brussels also made politically
difficult concessions on agriculture in an attempt to complete two
decades of talks with Mercosur -- the trading bloc that includes
Argentina, Brazil, Paraguay and Uruguay.
In a sign of internal challenges to the EU's agenda, however,
Belgium and Italy are already threatening the Canada deal. The pact
has been in provisional effect since September while awaiting
national approval from all 28 EU members for full
implementation.
Belgium has said it would only ratify the agreement if the EU's
top court decides it is compatible with the bloc's laws; the first
hearing is Tuesday. Italy's Agriculture Minister Gian Marco
Centinaio told La Stampa last week that the pact didn't provide
adequate recognition of Italian food products and the populist
government would seek to block its ratification.
"There are always questions about trade policy," the EU's trade
spokesman, Daniel Rosario, said Monday. "The European Commission is
working together with member states to show that trade policies are
mutually beneficial."
If an EU member explicitly refuses to ratify the Canada
agreement and formally notifies the EU, the agreement would die,
irking the bloc's partners and derailing its trade agenda.
Ms. Malmström said Monday that Italy was already benefiting from
the accord, with an 8% rise in exports to Canada. She said Brussels
would do its best to deliver a pact with Australia that all EU
members could support, as Rome's potential veto on the Canada
agreement stokes concerns over the bloc's ability to complete
deals.
Ahead of negotiations with Australia and New Zealand, the bloc's
strong agriculture lobby -- which was among the leading forces
against free-trade deals with Canada and the U.S. -- is also
raising red flags.
"We cannot accept sacrificing the livestock sector and food
security in return for better conditions in other strategic sectors
in the trade negotiations," the European farmers' lobby, Copa and
Cogeca, said last month.
Trade deals with Australia and New Zealand will boost Europeans'
long-run economic welfare by EUR4.8 billion ($5.6 billion),
according to EU assessments. The bloc runs a trade surplus with
both countries.
"We are committed to free trade and open markets," Mr. Turnbull
said. "We practice what we preach."
Write to Emre Peker at emre.peker@wsj.com
(END) Dow Jones Newswires
June 18, 2018 12:30 ET (16:30 GMT)
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