Top officials from the US and EU meet in Brussels on Monday in an effort to iron out differences on trade talks announced to great fanfare this summer.
US President Donald Trump and European Commission head Jean-Claude Juncker in July pledged to hold off from further tit-for-tat tariffs and to work towards a limited trade accord that would scrap customs duties on all goods.
Both sides ballyhooed the deal as a major breakthrough, but subsequent statements made clear that misunderstandings persisted, especially over agriculture, which Washington insists will be a key part of any agreement.
Under pressure from France, the Europeans firmly reject that farming goods be included in trade negotiations and Europe’s top trade official Cecilia Malmstrom will attempt to clear up the matter with US counterpart Robert Lighthizer.
“The idea is that the commission and the United States agree on a framework document, perhaps by the end of the year,” a European source told AFP.
“Trump and Juncker have an agreement, but in reality, we didn’t completely agree on the scope of the discussions,” she added.
Officials have set very low expectations for the meeting, which is the first of several expected sitdowns to map out on which sectors common ground can be found.
‘Bad as China’
The summer’s mending of fences is fragile however, with Trump last week again haranguing the EU and raising the spectre of slapping tariffs on Europe’s auto industry, especially with mid-term elections approaching in the US.
Auto tariffs would be seen as a devastating blow by Germany and would add to existing levies on steel and aluminium that Trump imposed on Europe in June. The EU imposed a raft of counter-duties in return.
The EU’s Malmstrom late last month said that a trade deal could include scrapping transatlantic tariffs on autos, but Trump swiftly excluded the possibility adding that Europe was virtually closed to US cars.
“It’s not good enough,” Trump said, speaking of the Brussels offer.
Trump also worryingly compared the EU to China, which on Friday received a threat of tariffs on all goods exported to the United States.
“The European Union is almost as bad as China, just smaller,” Trump told Bloomberg on August 31.
But the Europeans, led by jittery Germany, want the US at the negotiating table and seem ready to hand Trump small victories in exchange for the truce.
Since July the EU commission has announced a series of commitments to the US, but observers point out that these are largely done deals.
Most-celebrated by the White House is a huge increase in European purchases of US soybeans, that Trump says vindicates Washington’s toughness and resolve against its partners.
EU officials however say the explosion in demand is purely a market phenomenon and a knock-on effect of Trump’s trade war with China.