US and European Union negotiators were unable to reach agreement on a global steel arrangement in time for Friday’s leaders summit, but they agreed to continue negotiations and hold off on tariff hikes in the meantime.
Negotiators had hoped to have a deal in hand for leaders to endorse at the White House summit, but officials said more work is needed before both sides can support agreements on steel and aluminum and energy subsidies.
President Biden’s meeting with European Council President Charles Michel and European Commission chief Ursula von der Leyen ended up being primarily focused on international issues, including the war between Israel and Hamas and ensuring continued support for Ukraine in its fight against Russia's invasion.
“Sometimes we have our differences,” President Michel told reporters. “That’s why we are here: to cooperate, to find solutions that work for businesses and workers on both sides of the Atlantic.”
While discussions continue, Washington said it will continue to waive Section 232 national security tariffs imposed on EU steel and aluminum imposed by the Trump Administration while Brussels will hold off on reimposing the retaliatory tariffs in placed on US products.
The talks will continue through the end of this year.
A refusal by the US to clarify when it would remove punitive trade measures against the European Union is a key reason the transatlantic allies failed to reach an accord on steel trade this week that would have resolved a Trump-era dispute, according to the bloc’s chief trade negotiator. Valdis Dombrovskis, an executive vice president at the European Commission, said the US
previously agreed to work toward removing so-called Section 232 tariffs that hit more than $6 billion of EU steel and aluminum exports in 2018 as well as tariff-rate quotas that were introduced later as part of a temporary truce, Bloomberg news service reported.
“The main stumbling block was absence of clarity from the US side on a clear timeline and how the 232 tariff-rate quotas would be removed,” Dombrovskis said in an interview Friday following a summit in Washington. “Unfortunately, we have not seen a strong commitment and engagement from the US side to make sure those tariffs” are being removed, he said.
The GSA talks are aimed at settling a dispute that started when then-President Donald Trump slapped tariffs on metals imports from Europe, citing risks to national security, to which the EU responded with retaliatory measures. It aims to tackle global excess capacity and carbon emissions of dirty metals, and would also be open to like-minded countries.
On excess capacity, the EU is open to launching investigations in the coming months that could lead to new tariffs aimed at the non-market practices of economies such as China, while the US could introduce additional levies of its own, Bloomberg previously reported. The bloc would implement the carbon element of the arrangements through its carbon border levy and the US could pursue its own measures, and the two sides could seek to coordinate their approaches in future.
Negotiators have been unable to bridge differences on whether the US would provide a clear path to remove the tariffs and tariff-rate quotas. The EU has been pushing to shelve the measures, while the US wants to retain the option of using them in the future to ensure the bloc adequately implements any accord.
Other unresolved issues include the compatibility of the arrangements with international trade rules, particularly amid concerns it looks like a way for the EU and Washington to gang up on Beijing, as well as the scope of the accords and which markets other than China they’d hit, according to people familiar with the discussions who spoke on the condition of anonymity.
Following are excerpts of the US-EU summit joint statement
U.S.-EU Summit Joint Statement
The United States and the European Union and its Member States, representing nearly 800 million citizens, united by our values and bound together by the most dynamic economic relationship on earth, reaffirm our commitment to a transatlantic partnership that delivers for all our people. Since the last U.S.-EU Summit in June 2021, the world has changed in unprecedented ways, and we have taken ambitious steps in response. Together, we are working to secure peace, stability, and prosperity regionally and across the world, including in our steadfast support for Ukraine. We are deepening our cooperation to reflect the pressing challenges and opportunities of our time – strengthening our economic security; advancing reliable, sustainable, affordable, and secure energy transitions in our economies and globally; reinforcing multilateralism and international cooperation; and harnessing digital technologies to work for, not against, our shared values of democracy and respect for human rights and the rule of law. We are more united than ever.
China
The United States and European Union recall our discussions in other fora, including the G7, on the principles that underpin our relations with China. We stand prepared to build constructive and stable relations with China, recognizing the importance of engaging candidly with and expressing our concerns directly to China. It is necessary to cooperate with China, given its role in the international community and the size of its economy, on global challenges as well as areas of common interest. We call on China to engage with us, including in international fora, on areas such as the climate and biodiversity crisis, addressing vulnerable countries’ debt sustainability and financing needs, global health and pandemic preparedness, and macroeconomic stability.
With a view to enabling sustainable economic relations with China, we will push for a level playing field for our firms and workers. We are not decoupling or turning inwards. At the same time, we recognize that economic resilience requires de-risking and diversifying. In this context, we will invest in our own economic vibrancy and reduce critical dependencies and vulnerabilities, including in our supply chains. We also recognize the necessity of protecting certain advanced technologies that could be used to threaten global peace and security, without unduly limiting trade and investment. We will foster resilience to economic coercion. We will address challenges posed by non-market policies and practices.
We will keep voicing our concerns about the human rights and forced labor in China, including in Tibet and Xinjiang. With respect to Hong Kong, we call on China to honor its previous commitments with respect to Hong Kong under the Sino-Joint Declaration and the Basic Law.
B. STRENGTHENED U.S.-EU ECONOMIC COOPERATION
The U.S.-EU Trade and Technology Council (TTC) is the key forum for our cooperation on trade and technology matters. We commend the progress made and encourage advancing joint work in the run up to the upcoming TTC ministerial meeting later in 2023.
The United States and the European Union are committed to strengthening the transatlantic marketplace to support decent jobs and economic opportunities with an emphasis on mutually beneficial resilience and sustainability of our supply chains. We will advance the implementation of the Transatlantic Initiative on Sustainable Trade focusing on facilitating mutually beneficial trade across the Atlantic of products and technologies that underpin the transition to a climate-neutral economy.
Building the Sustainable and Resilient Economies of the Future
The United States and the European Union are deepening our collaboration to address the urgent and interdependent crises of climate change, biodiversity loss and pollution, and urge ambitious action by all other major players. We will work expeditiously to implement the Paris Agreement, halt and reverse the loss of biodiversity globally and protect the ocean. We will intensify our outreach to third countries, notably in view of the 28th UN Climate Change Conference of the Parties (COP28), making every effort to keep a 1.5 degree Celsius limit on global temperature warming within reach. We are committed to working together and with others for COP28 to reach bold commitments to dramatically increase global renewable energy capacity and energy efficiency while supporting a global shift away from unabated fossil fuels, including an end to new unabated coal fired power plants. We will continue to lead efforts to cut methane to support achieving the Global Methane Pledge and look forward to a robust Methane Finance Sprint announcement at COP28.
Together, we will work to build climate neutral, circular, resource efficient and resilient economies, to promote internationally recognized labor rights, and to improve the resilience and sustainability of critical supply chains. We will continue our work to advance the energy transition to climate neutrality and bolster energy security through the Joint Energy Security Task Force and U.S.-EU Energy Council.
We are making bold public investments in our respective economies, and will continue to also expand research collaboration, to ignite a clean industrial revolution and, with it, good jobs, and make our industries more sustainable and competitive. We will continue ongoing cooperation toward this end, and work openly and transparently against zero-sum competition to maximize clean energy deployment, including through our Clean Energy Incentives Dialogue.
We have made progress toward a targeted critical minerals agreement for the purpose of expanding access to sustainable, secure, and diversified high-standard critical mineral and battery supply chains and enabling those minerals extracted or processed in the European Union to count toward requirements for clean vehicles in the Section 30D clean vehicle tax credit of the Inflation Reduction Act. We look forward to continuing to make progress and consulting with our respective stakeholders on these negotiations in the coming weeks.
Expanding Technology Cooperation and Exchanges
The United States and the European Union are stepping up our joint efforts to promote an open, free, global, interoperable, reliable, secure, innovative, and competitive digital ecosystem. We are cooperating to manage the risks and harness the benefits of artificial intelligence (AI), working alongside our partners in the G7, OECD, and other multilateral fora. We affirm our continued work through the TTC Joint Roadmap on Trustworthy AI and Risk Management to further guide the development of tools, methodologies, and approaches to AI risk management and trustworthy AI. We confirm our joint intention to endorse a code of conduct for organizations developing advanced AI systems as part of the G7 Hiroshima process in the near term. We confirm our commitment to use AI for Public Good, particularly in the areas of agriculture, extreme weather prediction, emergency management and response, electric grid optimization, and health and medical research. As new and more advanced AI systems emerge, we plan to build on work done to promote responsible AI and work with industry, civil society, academia, and other stakeholders to enable trustworthy development and uptake of those technologies, and to advance our shared vision of responsible innovation in line with our shared democratic values. We recognize the importance of expanding research collaboration between the European Union and the United States for critical and emerging technologies such as AI, quantum, renewable energy, and other key areas, including by enabling transatlantic research funding activities that allow for both U.S. and EU researcher leadership while considering reciprocity in access to respective U.S. and EU research programs and ensuring symmetry in managing intellectual property. We commit to working together to finalize an agreement on quantum-related items for the upcoming TTC meetings.
We aim to build a more secure cyberspace together. We endeavor to cooperate to promote high cybersecurity standards to protect consumers and business and decrease vulnerability to cyberattacks. To that end, we commit to work together on achieving mutual recognition for our government-backed cybersecurity labeling programs and regulations for Internet-of-things devices aiming at a Joint CyberSafe Products Action Plan. We will work for consumers in Europe and the United States to have an easy and reliable way to assess whether devices they bring into their homes, offices, and schools are secure.
Promoting Rules-Based Trade and Countering Unfair Competition
The United States and the European Union have a shared interest in reforming the WTO so that Members can better achieve the WTO’s foundational objectives and address modern-day imperatives. We will work towards substantial WTO reform by MC13 in 2024 including by conducting discussions with the view to having a fully and well-functioning dispute settlement system accessible to all WTO Members by 2024.
On 31 October 2021, we announced that we would negotiate within two years an arrangement – known as the Global Arrangement on Sustainable Steel and Aluminum (Global Arrangement) – to address non-market excess capacity and emissions intensity of the steel and aluminum industries, including to foster undistorted transatlantic trade. Throughout these two years, we have made substantial progress to identify the sources of non-market excess capacity. We have also achieved a better understanding of the tools to address the emissions intensity of the steel and aluminum industries. We look forward to continuing to make progress on these important objectives in the next two months.
Strengthening Economic Resilience and Economic Security
The United States and the European Union are continuing to cooperate to enhance the resilience of our economies and advance our economic security interests, underpinned by a rules-based system, while preserving an open economy and a global level playing field. We will de-risk and diversify where we assess there are risks through proportionate, precise and targeted measures to address economic security challenges. We will continue working together to reduce excessive dependencies in critical supply chains, in close cooperation with partner countries. We share concerns about the challenges posed by, among other issues, economic coercion, the weaponization of economic dependencies, and non-market policies and practices. We will continue this work through inter alia the TTC, and with the G7 and other partners to diversify our supply chains and increase our collective preparedness, assessment, deterrence, and response to economic coercion.
We have a shared interest in protecting those advanced technologies that could be used to undermine global peace and security, and are developing our respective economic security toolkits to ensure our companies’ capital, expertise, and innovations will not be used to do so. Recognizing that outbound investment measures are necessary to complement its existing economic security toolkit, the President of the United States has issued an Executive Order to address risks from outbound investment and is consulting stakeholders on the U.S. rules. The European Union and its Member States are similarly exploring, based on a risk assessment, whether outbound investment measures could complement its existing toolkit. Export control regimes are central to maintain international security and stability, and necessitate cooperation between actors – including in multilateral fora – to ensure our dual-use technology protection ecosystem is continuously improved upon and cannot be exploited. We will cooperate and share lessons as we work to maximize the effectiveness of our economic security toolkit to achieve our shared interest.
Foreign information manipulation and interference is a borderless threat that poses a risk to democratic values, processes, and stability. We will expand collaboration based on common principles, such as dedicated strategies, internal organizational structures, capacity, civil society and multilateral engagement. This cooperation should aim to support like-minded partners in countering foreign information manipulation and interference, including via U.S. and EU coordinated activities, while safeguarding freedom of expression together with partner countries.
Comments
No comments on this item Please log in to comment by clicking here