Potential political discord anticipated in the European Parliament regarding the EU Commission's proposed trade agreement with the United States
The European Commission has initiated the implementation of a trade agreement reached on August 21 with the United States. This agreement, though not addressing the aluminium and steel sectors, which remain subject to tariffs of up to 50%, is set to bring significant changes to the EU-US trade landscape.
Within the S&D group, there are efforts to continue negotiations to improve the deal, particularly focusing on the aluminium and steel sectors. The S&D group finds the current agreement unbalanced and seeks more exemptions and a clear path for an agreement on these sectors. Swedish MEP Jörgen Warborn is waiting for a better understanding of the agreement before making a decision, expressing concerns about its compatibility with WTO rules.
The proposal includes reducing tariffs to 0% on the vast majority of US industrial products, such as machinery, pharmaceutical products, chemicals, plastics, and fertilizers. Tariff-rate quotas are planned for 20 product groups, including pork, dairy products, cheese, and soybeans, which will benefit from 0% tariffs below the set thresholds. The Commission has also declared privileged access to its market for certain agricultural products, whose tariffs will be reduced.
The legislative proposal for tariff reductions on a wide range of US industrial and agricultural products will be considered by the European Parliament next week. Sabine Weyand, Director-General of DG Trade and one of the chief negotiators, will attend a heated session to answer questions from MEPs responsible for monitoring trade issues on September 3.
Anna Cavazzini, chair of the Committee on the Internal Market and Consumer Protection, is engaged in dialogues related to trade and investment partnerships and will play a key role in the discussions. The agreement may face criticism in the European Parliament, with some MEPs denouncing it as unbalanced. MEP Marie-Pierre Vedrenne sees the conclusion of the agreement as a humiliation and a surrender.
The US has committed to retroactively lower its 27.5% tariffs on EU cars to 15% from August 1, once the Commission proposed the legislation. However, the details of this commitment and its impact on the EU auto industry are yet to be fully understood.
As the agreement moves forward, the European Parliament and the EU Council, which represents the member states, will need to approve the legislative proposal for it to become law. The official debate in the European Parliament is set for September 10, involving the Commission and the Danish Presidency to discuss the agreement and related trade issues. The outcome of these discussions will shape the future of EU-US trade relations.
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