Some tariffs remain Beef, poultry and pork would remain protected but import quotas will be raised
BRUSSELS, Belgium (Reuters) — The European Union will offer to lift tariffs on nearly all goods imported from the United States as part of negotiations toward the world’s largest free trade deal, say officials familiar with the proposal.
The offer was expected to be made Feb. 10, after this issue’s deadline, a week ahead of face-to-face talks between EU trade chief Karel De Gucht and his U.S. counterpart, Michael Froman, in Washington.
The European Commission, which handles trade issues for the EU’s 28 member states, will tell the U.S. how far it is willing to open its markets, while U.S. officials are expected to do the same.
Officials familiar with the EU’s proposal have said the trading bloc will offer to lift 96 percent of existing import tariffs, retaining protection for just a few sensitive products such as beef, poultry and pork.
“This is just the first step, but it sends a message that no sector will be completely shielded from liberalization,” said an official involved in preparing the EU offer.
Two other European officials confirmed the offer.
The U.S. and the EU are seeking to seal a transatlantic trade deal en-compassing half the world’s economic output in the hope that an accord can bring economic gains of $100 billion a year for both sides.
The exchange of market access offers on Feb. 10 was expected to happen simultaneously so that neither side had an advantage over the other. The swap would mark the first concrete step since negotiations were launched last July, although offers can change considerably during trade talks.
Officials close to the offer exchange said the EU’s proposal was split into four categories:
- Brussels will offer to drop 96 percent of tariffs on the understanding that Washington reciprocates.
- Two transition categories will be proposed for a further three percent of goods, with periods of three and seven years until tariffs are dropped, to allow EU industry to adapt. These could include commercial vehicles and some agricultural products.
- Sensitive products such as beef, pork and poultry would remain protected, but the U.S. would be granted enlarged quotas. Those quotas would be decided at a later date.
Tariffs between the U.S. and the EU are already low, and Brussels and Washington see greater economic benefits of a transatlantic accord coming from dropping barriers to business.
However, in a marketplace of 815 million people, all moves to lower the cost of trade are seen as beneficial for companies, particularly automakers that have U.S. and European plants, such as such as Ford, General Motors and Volkswagen.
EU cars imported into the U.S. are charged a two percent duty, while the EU sets a 10 percent duty on U.S. cars. The burden for automakers amounts to $1 billion a year when even higher duties for trucks and commercial vans are included.