Trade Agreement Between US and EU: Disagreements and Ongoing Bargaining Sessions
The European Union (EU) and the United States have reached a trade agreement, setting a new baseline for transatlantic commerce. However, significant discrepancies remain regarding the specifics of the deal.
The EU-US trade agreement, largely concluded between President Trump and European Commission President Ursula von der Leyen, includes a 15% tariff ceiling on most EU exports to the US, including cars, car parts, and potential future tariffs on pharmaceuticals and semiconductors [1][5]. The EU will purchase an additional $750 billion in US energy products over three years and invest $600 billion in US sectors by 2029, while the US will not increase tariffs on exports to the EU [1][3].
However, there are differences in the summaries released by the White House and the European Commission. The White House asserts that Europe will purchase military equipment worth hundreds of billions of dollars, a provision not mentioned in the European summary [1]. On the other hand, the EU describes tariff rate quotas that lower the current 50% tariffs on steel, aluminium, and copper to historic levels, ensuring fair global competition [1].
Besides tariffs, the agreement includes cooperation on reducing non-tariff barriers, particularly for food and agriculture. This includes streamlining sanitary certificates for US pork and dairy and addressing unjustified digital trade barriers by maintaining zero customs duties on electronic transmissions [2]. Economic security collaboration to enhance supply chain resilience and coordinated actions on third-party non-market policies are also emphasized [2][4].
The EU has released a new complaint system to address trade deal violations and market barriers. This system could potentially be used to address market barriers, such as the limited quantities of agricultural products that European markets may allow from the US [6].
The EU-Canada trade deal, a separate agreement, is set to be signed by governments. This signing is a separate event from the anticipated formal joint statement on the EU-US trade agreement, which is expected this week [7].
Despite the progress made, both sides are expected to continue negotiations towards a legally binding text [8]. The current agreement is political and not legally binding at this stage, with further negotiations planned to deepen tariff reductions and address broader trade issues [5].
Meanwhile, the EU-Ukraine Free Trade Area negotiations did not result in a concluded agreement at the final meeting [9].
References
- The White House Fact Sheet on the US-EU Trade Agreement
- European Commission Fact Sheet on the US-EU Trade and Technology Council
- Bloomberg: US-EU Trade Agreement Includes $750 Billion in Energy Purchases, $600 Billion in Corporate Investments
- Reuters: US-EU Trade Deal to Boost Supply Chain Resilience, Coordinate Actions on Third-Party Policies
- Politico: EU-US Trade Deal: What We Know So Far
- Reuters: EU's New Complaint System to Address Discrepancies in Ongoing Negotiations with US
- EU Observer: EU-Canada Trade Deal to be Signed by Governments
- Politico: EU and US Agree to Continue Negotiations Towards a Legally Binding Text
- Euractiv: No Outcome Reached at Final Meeting on EU-Ukraine Free Trade Area
The agreement, with regards to global trade, serves as a new policy-and-legislation milestone in transatlantic commerce between the European Union and the United States. The deal involves a 15% tariff ceiling on EU exports, investment in US sectors, and cooperation on reducing non-tariff barriers. However, discrepancies persist in the specifics, particularly over details such as military equipment purchases.
