The meeting between the US and EU presidents in Washington has eased tensions amid fears of a trade war, though some play down the significance of what was agreed.
Wednesday’s meeting in Washington between Donald Trump and Jean-Claude Juncker brought a positive declaration that has eased fears of a commercial war between the United States and the European Union.
The US president backed off on a threat to impose tariffs on European car imports while the two sides launched negotiations to cut other trade barriers.
However, some commentators are playing down the significance of what was agreed, saying much remains unresolved.
What concrete measures did they announce?
“We agreed to work towards zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods,” the US president told a joint news conference after the meeting.
In a joint statement the two leaders also pledged to reduce barriers and increase trade in services and agriculture. The EU has agreed to accept more imports of soy beans from the US.
The EU has also vowed to import more liquefied natural gas (LNG) from the US to diversify its energy supply.
Both sides also pledged to cooperate over standards and to combat unfair trade practices, seeking to reform World Trade Organization (WTO) rules.
Finally, they said they wanted to resolve the tit-for-tat tariffs row, following the US imposition of steel and aluminium tariffs on European exports.
What will it actually mean?
The statement said that reducing tariffs and barriers would open markets, boost investment and prosperity on both sides of the Atlantic, and bring fairer trade. However, this was only a declaration of intent, not a detailed accord.
Both sides are interpreting it differently. The European Commission has hailed “a new phase” in relations, with its president highlighting the intention to seek zero tariffs on industrial goods. “I had one intention today, to make a deal, and we made a deal,” Juncker said.
The White House is portraying it as a victory for Trump. It tweeted a link to a Fox News report highlighting EU “concessions” on soy beans, energy and tariffs. However, it’s thought some of these moves have limited significance and will be difficult to implement.
Former WTO chief Pascal Lamy sees the start of a new negotiation towards an agreement which could contain “bits and pieces” of the Transatlantic Trade and Investment Partnership (TTIP), begun in the Obama era.
But he believes the pledge to work together to reform WTO rules could be more important, particularly regarding Chinese subsidies and other practices. Juncker came back from Beijing last week “with an agreement by the Chinese that some of these WTO rules should be renegotiated,” Lamy told Euronews’ Good Morning Europe. “So Juncker did not come to Washington empty-handed.”
What was at stake in this meeting?
Juncker’s visit came against a background of increasing tensions in the wake of US tariffs on steel and aluminium imports. The EU retaliated with counter measures targeting the likes of Harley Davidson motorbikes and bourbon.
The danger of further escalation was clear, given Trump’s threat to raise tariffs on car imports and his calling the EU a “foe” on trade. Some 800,000 jobs in Germany alone are linked to the car industry, while 20,000 European jobs are dependent on steel exports to the US.
In that light, the outcome of the meeting is being seen as a surprising and welcome development, despite the lack of detail behind the pledges.
What didn't they resolve?
Although both leaders said they would work towards resolving it, US tariffs of 25 percent on steel and 10 percent on aluminium remain in place.
Also, some may note the lack of specific reference to EU car exports. A US investigation is ongoing into whether they constitute a danger to national security. Trump has threatened to impose a massive hike in tariffs from the current three percent to 25 percent.
In Washington, Juncker said both sides would refrain from imposing additional levies. The US president said he wouldn’t “go against the spirit of this agreement”. However, Trump remains vexed over the EU’s 10 percent tariff on car imports: the US imposes only 2.5 percent on passenger cars, although its rate on imported pickup trucks is 25 percent.
There are also concerns over a lack of clarity about the long-term EU-US trading relationship.