Marjorie Chorlins Marjorie Chorlins
Senior Vice President, Europe, U.S. Chamber of Commerce


July 02, 2019


At last week’s G20 summit in Osaka, Japan, the European Union and the Mercosur countries of South America — Argentina, Brazil, Paraguay, and Uruguay — announced that they’ve struck a deal for a comprehensive trade agreement.

The announcement of this deal is great news… for workers, farmers, and companies in those countries.

They will have privileged access to one another’s markets, while European and South American tariffs and other barriers will continue to put U.S. exporters at a competitive disadvantage.

This trade deal follows many others in recent years. The current European Commission has aggressively expanded its network of preferential trade deals since it took office in 2014, as pacts with 15 countries have entered into force. In fact, the EU has trade agreements with nearly 75 countries.

The EU also signed a new trade deal with Vietnam over the weekend. A trade deal with Singapore came into force provisionally earlier this year, and negotiations are advancing with Australia and New Zealand.

It’s almost easier to name countries with which the EU does not have a trade agreement in place or under negotiation.

Meanwhile, talks between the U.S. and EU have yielded less progress than hoped for since President Trump and Commission President Juncker met in July 2018 and outlined priorities to boost transatlantic trade and investment.

There has been some forward trajectory between the U.S. and the EU. For example, Europe has bought more soybeans and liquefied natural gas (LNG) from U.S. producers, officials are making progress on some discrete regulatory issues, and an agreement to recognize one another’s product safety tests is being developed.

Yet tension in the relationship is palpable. The Trump administration’s tariffs on European steel and aluminum imports were misguided. Imposing similar measures on European imports of automobiles and automobile parts would magnify the consequences of that decision ten-fold. As a result, Brussels has said it has a retaliation list at the ready should the U.S. impose auto tariffs.

While the U.S. must deal with the ramifications of those tariffs it imposed, the Europeans also bear responsibility for the current state of play. They know that improved market access for American farmers is a political must-have here, yet they refuse to discuss agricultural barriers. Member states are considering taxes on the digital economy that would disproportionately affect American firms or, in the case of at least one proposal, hit them exclusively. As Europe beefs up its defense capability, there is growing concern that U.S. companies may face discrimination in European markets.

Washington and Brussels must move past our differences to build a positive agenda. While the U.S. Chamber of Commerce advocates for comprehensive trade agreements that address not just trade in goods but also services, investment, procurement and other issues, eliminating tariffs on industrial goods — as the U.S. and the EU have proposed — would deliver meaningful benefits. Though current tariffs are low, the flow of trade is so large that eliminating them would generate substantial economic gains.

The two sides should continue to pursue regulatory cooperation initiatives and work together to set standards where none yet exist. The shift to autonomous vehicles presents a golden opportunity to start off on the right foot. The two sides should also develop common approaches for cybersecurity and artificial intelligence. Transatlantic leadership on sustainability and the circular economy is also essential.

In addition, Europe and the U.S. must stand united as we confront China’s unfair business practices at home and abroad. Together, we should update World Trade Organization rules and processes to ensure all members abide by their commitments. Pursuing a unilateral, tariff-driven approach is not the optimal way to effect lasting change in China. A coordinated approach with Europe and other partners would be much more powerful.

As we near the one-year anniversary of the Trump-Juncker summit, the U.S. and EU must redouble efforts to engage in a win-win negotiation. As economies that, together, account for nearly half of global GDP in nominal terms and half of global personal consumption, the U.S. and Europe can shape the rules of global trade for the 21st century as no others can.

The stakes for American business are clear: Europe is securing preferential access in markets around the world for its manufacturers, service providers, and farmers. We need to rise to the challenge, or American workers, farmers, and companies will be left on the sidelines. On trade, when you stand still, you fall behind.

About the authors

Marjorie Chorlins

Marjorie Chorlins

Marjorie A. Chorlins is senior vice president for European Affairs at the U.S. Chamber of Commerce and the Executive Director of the U.S.-UK Business Council.

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