Trump Administration Reneges On Commitment To Leave Ag Out of Trade Talks With E.U. - Global Trade Magazine
  January 17th, 2019 | Written by

Trump Administration Reneges On Commitment To Leave Ag Out of Trade Talks With E.U.

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  • “We have made very clear that agriculture would not be included.”
  • The document doesn’t say what products are import-sensitive.
  • Trump reportedly told Juncker in December that he wouldn’t impose the car tariffs on the E.U.

Trade negotiations between the United States and the European Union are likely to get off to a bad start. On July 25 of last year, President Trump and European Union President Jean-Claude Juncker agreed to start negotiations toward a U.S.-E.U. trade agreement that would reduce or eliminate tariffs on non-automotive industrial goods. In a joint statement, they agreed that agriculture would not be discussed, except that the E.U. would increase the volume of American-grown soybeans it buys.

Either Trump and his trade officials have forgotten the no-ag agreement or they’re worried that American farmers’ patience with Trump’s trade war, and thus Trump himself, is running out. Or, they’re worried that Congress won’t ratify an agreement that excludes agriculture. Whatever the reason, Trump has reneged on that commitment; the administration is now seeking “secure comprehensive market access for U.S. agricultural goods in the EU by reducing or eliminating tariffs.”

The administration’s negotiating objectives, released Jan. 12 by the White House, also include “reasonable adjustment periods for U.S. import-sensitive agricultural products . . . before initiating tariff reduction negotiations.” The document doesn’t say what products are import-sensitive.

“We have made very clear that agriculture would not be included,” EU trade commissioner Cecelia Malmström said after meeting with U.S. Trade Representative Robert Lighthizer on Jan. 9.

A statement from the E.U. delegation in Washington said, “The Joint Statement is very clear that agriculture is not part of the negotiations. As explained by Commissioner Malmström we are not going to discuss agriculture, as we are also not discussing other issues such as public procurement or geographical indications.”

There’s a good reason for that. An inability to come to terms on a variety of agricultural issues was the principal reason the U.S. and the E.U. failed to finish negotiating the Trans-Atlantic Trade and Investment Partnership, or TTIP, before the end of the Obama administration. One of them was geographic indications, the naming of food products after the places where they’re produced, such as Champagne and Parma ham. U.S. and E.U. TTIP negotiators couldn’t come to terms on those.

There’s no reason to expect a better result this time around. For one thing, ex-president Barack Obama was popular in Europe. Trump is not.

Nonetheless, Sen. Chuck Grassley, R-Iowa, told reporters, “I don’t know how anybody in Europe that wants a free trade agreement with us can expect it to get through the U.S. Senate if you don’t want to negotiate agriculture.”  Grassley chairs the Finance Committee, which has jurisdiction over trade policy.

Employing his usual strong-arm negotiating style, Trump has held out the threat of a 25% tariff on car imports against trading partners that don’t bend to his will. This has caused no little consternation in Germany, which exports a lot of Mercedes, BMWs and Volkswagens to the United States. Trump reportedly told Juncker in December that he wouldn’t impose the car tariffs on the E.U. But he also agreed that agriculture would be off the table, and now here we are, trying to put it back on.

After their July 2018 meeting, Trump and Juncker held a press conference, which Trump concluded by saying, “this was a very big day for free and fair trade.  A very big day indeed.”

It will be a very big day for free and fair trade if and when Congress and the European Parliament ratify a U.S.-E.U. free trade agreement. If Trump had stuck to his agreement with Juncker, that might be achievable relatively soon. If the administration persists in demanding agriculture negotiations, it might not be achievable at all.

John Brinkley was speechwriter for U.S. Trade Representative Michael Froman and for Korean Ambasador Han Duk-soo during the Korean government’s quest for ratification of the Korea-US Free Trade Agreement.