Washington: In a significant development, the US and the European Union (EU) have agreed to iron out trade dispute through negotiations and put on hold the tariff war while they talk through their differences.
The move came after a meeting between US President Donald Trump and European Commission President Jean-Claude Juncker in Washington on Wednesday.
Addressing a joint press conference in the Rose Garden at the White House, the two leaders agreed to begin discussions on eliminating the tariffs and subsidies that hamper trade across the Atlantic. “We met right here at the White House to launch a new phase in the relationship between the US and the European Union— a phase of close friendship; of strong trade relations in which both of us will win; of working better together for global security and prosperity; and of fighting jointly against terrorism,” Trump told reporters.
This is a significant development because the US and the EU together count for more than 50 percent of the global Gross Domestic Product (GDP).
“Together, we are more than 50 percent of trade. If we team up, we can make our planet a better, more secure and more prosperous place,” Trump said. The US president said both the parties have agreed to work together toward zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods.
“We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans...This will open markets for farmers and workers, increase investment, and lead to greater prosperity in both the US and the EU," he said. “It will also make trade fairer and more reciprocal,” Trump added.
The two sides also agreed to strengthen strategic cooperation on energy. "The EU will build more terminals to import liquefied natural gas from the US," Juncker said.
They also agreed to work closely together to reform the World Trade Organisation (WTO) and to address unfair trading practices, including intellectual property theft, forced technology transfer, industrial subsidies, distortions created by state-owned enterprises and overcapacity.
Meanwhile, welcoming the decision, International Monetary Fund (IMF) Managing Director Christine Lagarde said, “The global economy can benefit only when countries engage constructively to resolve trade and investment disagreements without resort to exceptional measures.”
The US Chambers of Commerce also hailed the move. “We welcome an open US-EU dialogue so that leaders can work quickly to reverse the damage caused by tariffs,” executive vice president and head of international affairs at the US Chambers of Commerce Myron Brilliant said.
American businesses are ready to get back to the work of creating jobs and driving the economy instead of worrying about the implications of a burgeoning trade war, he added.
The US House Committee on Ways and Means chairman, Kevin Brady, congratulated Trump for reaching the vitally important and timely agreement with Juncker. The committee is the chief tax-writing panel of the US House of Representatives.
“This start is an excellent news...By moving the EU to work with us to address China's unfair trade and to reform the WTO, the President and his team have fundamentally changed the trading environment in a way that will benefit all Americans," Brady said.
Updated Date: Jul 26, 2018 14:26 PM