Joe Biden’s trade war with EU continues as wine makers urge US to stop punitive tariffs
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The Obama administration attempted to strike a trade deal with Brussels known as the Transatlantic Trade and Investment Partnership (TTIP), which would have made it easier for American products to be sold in Europe and vice versa. However, both sides failed to come to an agreement and further talks died after Donald Trump became President in 2016. Some in Europe believed the election of Joe Biden in November, who was Mr Obama’s Vice President during the TTIP negotiations, would rekindle the push for free trade across the Atlantic.
However, this does not seem the case.
In January, Mr Biden signed an executive order to tighten “Buy American” requirements in federal government procurement – a first step to fulfilling his campaign promise to bolster the country’s manufacturing sector.
And despite pressure from the EU to repeal the Jones Act to allow greater competition in the shipping sector, administration officials announced Mr Biden will also soon reiterate his support for the law, which requires goods shipped within the US to be transported on American vessels.
Economic tensions between the US and EU were already quite high.
The Trump administration placed billions in tariffs on European goods, and both the US and EU recently concluded a rancorous trade dispute over subsidies to their major aviation companies.
EU wine producers seem to be some of the hardest hit.
Only last month, Washington started collecting fresh duties on wine imports on top of the 25 percent tariffs already in place on French, Spanish and German wine, all of which were imposed as part of the long-running trade fight with the EU at the World Trade Organisation over state subsidies for plane giants Boeing and Airbus.
This was despite intensive lobbying to settle the dispute from the wine sector, which hoped that the escape valve of exporting to America could have helped make up for the disintegration of drinking at bars, restaurants, celebrations and on holidays across the continent.
Bernard Farges, the president of European Federation of Origin Wines (EFOW), a group representing the specially protected EU wines that make up the bulk of the bloc’s transatlantic exports, said: “It’s a diplomatic urgency to make sure that these tariffs for wines exported to the United States stop as soon as possible.”
Although most of the wine grown in the EU is also sold across the continent, the US is a crucial market for bloc producers.
According to Eurostat, the next biggest drinkers, Russia and China, don’t even come close.
Data from FEVS, the French wine exporters’ federation, shows that wine exports to the US have dropped in value by 18 percent.
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The group priced the drop at €386million (£334million) in 2020.
Wine lobbies and EU politicians are pressuring EU trade chief Valdis Dombrovskis to do something about the trade barrier.
Mr Dombrovskis said in a speech at the US Chamber of Commerce earlier this month that the EU wants “to act quickly” to negotiate a solution to the aircraft subsidies dispute and said he was “eager to work on mutual suspension of all tariffs and countermeasures”.
Nevertheless, the wine sector is still waiting for real change.
Ignacio Sánchez Recarte, the secretary general of European wine exporters lobby group CEEV, added: “We are realistic and we knew that Biden cannot just arrive and the day after eliminate or suspend these tariffs.”
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But he warned that the import duties are damaging EU exports “extremely” with every passing week.
In an exclusive interview with Express.co.uk, Government trade adviser Shanker Singham said on the US-EU relationship going forward: “The Democrats are going to be more hostile to some of the European policies going forward.
“The Trump administration was not a big fan of big tech but the Democrats on the West Coast are, and digital services taxes in Europe are going to be a massive impediment and barrier.
“Standard issues are also going to be a massive impediment in a deal between the US and the EU.”
Finally, on agriculture, Mr Singham noted, the Democrats are stronger on market access for US producers and farmers, whereas European agricultural protectionism will continue.
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