EU presses with plans for ‘limited’ US trade deal

BRUSSELS, Jan 20 (AFP): The European Union (EU) pressed recently with plans to forge a trade deal with the US, part of an effort -- backed by Germany -- to avert a trade war with President Donald Trump.

Negotiating a deal was the key to a transatlantic truce secured last year after the US slapped tariffs on steel and aluminium imports from the EU and others, alarming the world.

The effort is also part of a strategy to stop Trump from slapping damaging duties on car imports from Europe, a danger that has especially unnerved Berlin.

"It is not a traditional (trade deal)... it is a limited but important proposal engaged on industrial goods tariffs only," EU trade commissioner Cecilia Malmstrom told reporters.

The process has got off to a rocky start, however, with the US side last week including agricultural products in their plans, which is an absolute no-go for the Europeans.

"In this mandate, we are not proposing any reduction of tariffs on agriculture. That area was left outside," Malmstrom insisted.

The 17-page proposal submitted by the US also included other demands that are unacceptable for the EU, including that Europe stop "manipulating" foreign exchange rates.

Given the split, the EU is entering the negotiations with trepidation, especially since the threat of auto duties is still very much alive in Washington.

The commission said it was open to slashing tariffs for US car imports as part of the deal, though Washington has proved reluctant, unwilling to expose its crucial small trucks market in return.

The commission handles trade negotiations for the EU's 28 member states and the plans must now be approved by the national governments before negotiations start with Washington.

The deal attempt is widely understood to be pushed behind the scenes by Berlin, eager to shelter its auto giants from the wrath of Trump.

German Minister of Economics Peter Altmaier welcomed the deal and looked forward to talking "concretely" with the US.

Meanwhile, the European Union is willing to discuss car tariffs but will not remove duties on farm products in free trade talks with the United States, its trade chief said recently, setting it on a possible collision course with Washington.

The European Commission, which coordinates trade policy for the 28 member European Union, published two negotiating mandates recently, which were notable more for what they left out than for what they included.

The EU proposal on tariffs falls far short of the wide-ranging wish-list, including comprehensive agricultural market access set out by US President Donald Trump's administration a week ago.

"There is a lot that is not covered. We are not proposing any negotiations with the US to reduce or eliminate on agricultural products," EU Trade Commissioner Cecilia Malmstrom told a news conference.

The EU and United States reached an entente in July, ending a stand-off of several months, when Trump agreed to hold off imposing tariffs on EU car imports while the two sides looked to improve trade ties.