#Trade: EU to seek clarification on US proposals before imposing counter measures

| March 9, 2018

US President Donald Trump yesterday signed two presidential proclamations on adjusting imports of aluminum and steel into the United States. The EU outlined what its response would be earlier in the week, today (9 March) Vice-President Katainen replied saying that as the EU is not a source of unfair trade, or a security threat it should be exempted, writes Catherine Feore.

Commissioner for Trade Cecilia Malmström said earlier in the week (7 March) that she was ready to react proportionately and in line with WTO rules to protect the EU’s economic interests if the US decided to introduce global tariffs on steel and aluminium.

Malmström was particularly doubtful of the US’s national security justification saying that the EU was a friend and ally in NATO.

Malmström outlined a provisional list of products the Commission is looking at should it decide to introduce ‘re-balancing measures’. The list included: steel, agricultural and industrial products Bourbon, peanut butter, orange juice and cranberries.

Both Katainen and Malmström said that the root cause of the problem in the steel and aluminium sector is global overcapacity. Hinting at China they attribute this over capacity to massive state subsidies, produced under non-market conditions. They say that this can only be addressed by continued cooperation, getting to the source of the problem and working together. A senior EU official told EU Reporter that this was a clear case of protectionism, saying that the EU and US are aligned on national security, on over-capacity and have taken firm action on anti-dumping.

The accusation of protectionism appears to be borne out by President Trump’s tweet:

Tomorrow (10 March) Malmström will meet with Robert Lighthizer, US Trade Representative, and Hiroshige Seko, Japanese Minister for Economy, Trade and Industry to discuss the US proposals. The EU will seek clarification on the mandate and basis for exclusion.

Asked if the EU would be offering any concessions to the US, a senior official explained that the EU was not negotiating and was not in a negotiating situation.

UK seeks exemption

The UK Secretary of State for International Trade Liam Fox said earlier in the day that he would seek an exemption from the US measures. When we asked the European Commission if the UK could act unilaterally, we were told that as long as the UK was a member of the EU with its common trade policy this would not be possible. We also asked if the UK could try to veto adding tariffs to goods exported from the UK. The Commission said that this would be unlikely as the decision under the trade enforcement regulation would be subject to qualified majority voting.


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