#Trade - EU agrees to eliminate tariffs on #USLobster

Maine Lobster

United States Trade Representative Robert Lighthizer and European Union Trade Commissioner Phil Hogan today (21 August)  announced an agreement on a package of tariff reductions that will increase market access for hundreds of millions of dollars in US and EU exports. These tariff reductions are the first US-EU negotiated reductions in duties in more than two decades.

Earlier in the year, President Trump threatened to introduce tariffs on cars if the EU did not remove tariffs on Maine lobster, as brilliantly lampooned by Sarah Cooper. He said that it was unbelievable how bad the EU had been in terms of trade, and that the EU was almost as bad as China.

The main barrier to trade between the EU and US is non-tariff barriers, tariffs are on average very low at under 3%.  The controversial Transatlantic Trade and Investment Partnership (TTIP) aimed at removing these barriers was developed under the Obama administration and abandoned under the current administration.

Under the agreement, the EU will eliminate tariffs on imports of US live and frozen lobster products. US exports of these products to the EU were over $111 million in 2017. The EU will eliminate these tariffs on a Most Favored Nation (MFN) basis, and they will be applied retroactively to the beginning of  August. The EU tariffs will be eliminated for a period of five years and the European Commission will promptly initiate procedures aimed at making the tariff changes permanent. 

How to lobster pic.twitter.com/PZTlomCi5T

— Sarah Cooper (@sarahcpr) June 9, 2020

The United States will reduce by 50% its tariff rates on certain products exported by the EU worth an average annual trade value of $160m, including certain prepared meals, certain crystal glassware, surface preparations, propellant powders, cigarette lighters and lighter parts. The US tariff reductions will also be made on an MFN basis and as with the Maine lobster will be applied retroactively.

In a joint statement Ambassador Lighthizer and Commissioner Hogan said: “As part of improving EU-US relations, this mutually beneficial agreement will bring positive results to the economies of both the United States and the European Union.  We intend for this package of tariff reductions to mark just the beginning of a process that will lead to additional agreements that create more free, fair, and reciprocal transatlantic trade.” 

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