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EU, US should find 'negotiated solution' to trade tensions, says Cecilia Malmstrom

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EU, US should find 'negotiated solution' to trade tensions, says Cecilia Malmstrom
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The European Union and the United States should "sit down and find a negotiated solution" instead of imposing tariffs on each other, the outgoing European Commissioner for Trade, Cecilia Malmstrom, told Euronews.

In an exclusive interview with Euronews' Global Conversation programme, Malmstrom also discussed the bloc's position on China and how trade deals can help in the fight against climate change and populism.

'Damaging for them and for us'

On EU-US trade relations, Malmstrom said it "would be natural" for an agreement to bound the two parties and that reaching one to "mutual benefit" is "still doable."

Trade relations between the bloc and the US have been tense since President Donald Trump stalled negotiations on the Trans-Atlantic Trade and Investment Partnership (TTIP) and imposed tariffs on European steel and aluminium. Trump has also threatened to slap on tariffs on European vehicle imports and $11 billion (€9.8 billion) worth of European goods over aircraft subsidies.

The EU has retaliated so far by imposing tariffs on $3 billion (€2.7 billion) worth of US goods including denim, Harley-Davidson and bourbon and drawn up another list worth over $22.5 billion (€20 billion) of American products should the US move ahead with its threats.

But the EU Council agreed last month to greenlight new negotiations with the US that will focus on eliminating tariffs on industrial goods and not on agricultural or farming products, at the heart of many a contention between the two parties.

Read more: How might EU trade sanctions on the US hit consumers? | Euronews answers

"Now the conditions have changed a little bit since the old TTIP days, but we have said that we can do something limited in order to regain some of that trust that has been lost and to build on that and see if we can facilitate trade between us to a mutual benefit and I think that is still doable," Malmstrom said.

On the issue of state aid for aircraft, Malmstrom told Euronews: "I hope that we don’t have to impose tariffs on each other."

"This is, in a way, a parallel track because, as you said, it has been going on for 14 years and lots of investigations. And those investigations have said that both the EU and the US have done a few things wrong.

"So we have the legal right to impose tariffs on each other but the best would be not to do that, but to sit down together and say: ‘how can we manage this in the future? How can we set norms and standards for airplane subsidies also vis à vis the rest of the world?’ And this is what we are offering to the US because we think it would be very damaging for them and for us if we put tariffs on each other. So I hope we can sit down and find a negotiated solution," she added.

China must 'follow international rules'

Asked whether China is a close partner or a systemic rival, Malmstrom replied: "Both actually."

In a strategic paper on EU-China relations released in March, the bloc drew Beijing's ire by labelling the country a "systemic rival" but some of the tensions were soothed last month at a summit in Brussels in which an investment deal was struck. China also committed to relax and eventually erase its industrial subsidies and demands for technological transfers from foreign companies in exchange to access to its market.

Stephanie Lecocq/Pool via REUTERS
Chinese PM Li Keqiang (C), the EU's Jean-Claude Juncker (L) & Donald TuskStephanie Lecocq/Pool via REUTERS

Read more: What does the EU trade with China? In charts

"China can be a partner in many areas: we cooperate on some research, on some environmental issues, for instance. We try to facilitate trade between us as well. We are negotiating an investment agreement, but we also try to tell China that they have to follow international rules and multilateral standards. Because the way they are subsidising their own companies, for instance, is dumping the international markets and that is harming producers and consumers all over the world," Malmstrom said.

"I hope that China can take a bigger responsibility to strengthen and to obey by multilateral rules because it has been very good for China as well," she added.

'Standing up against protectionism'

For the Commissioner, trade is also a tool to combat protectionism, populism and also climate change.

She argued, for instance, that the agreement between the EU and Japan — which came into force on February 1 — sends a powerful message to the rest of the world that the two sides are "standing up against protectionism", that they are committed to "improve conditions for small and medium-sized companies" and that they are "willing to strengthen WTO (World Trade Organisation) and other international organisations".

"I think that in times of protectionism this is an important message," she also said.

"We have engaged during my mandate a lot with those who have felt a lack of trust in trade policies or a general frustration of globalisation. Now trade is a good thing, it brings jobs and it brings much more jobs than disappear."

"But we have tried to engage with these people, listening to them, publishing basically everything we do, make it so we are the most transparent trade negotiator in the world and I think we have seen less (sic) protests against trade in the last years because we are trying to engage with people and we are also trying to see how trade can be beneficial to the small companies," she went on.

Malmstrom also urged people to listen to teenage activist Greta Thunberg and the millions of people demonstrating for more to be done to tackle climate change. She argued the EU is "the most ambitious bloc in the world" when it comes to tackling global warming and that trade can play its part.

"We engage with our trade partners to make sure that we collaborate on sustainable development to make trade greener, that we can cooperate on research, to make sure that we can find more environmentally-friendly transport because we transport goods and so on."

"Trade cannot do everything but it can do its part and we have, really the last years, become much greener in our trade agreements and that will continue," she assured.

Watch: Greta Thunberg makes powerful climate change speech in London

The EU isn't 'perfect'

Turning her attention to the upcoming European parliamentary elections, Malmstrom predicted that "we will probably see an increased amount of MEPs" from the far right but that "they won't be a majority, and they probably won't be able to create a bloc because they don't really like each other either".

"But they can put difficulties in the machinery and make it more difficult to make laws in the future.

"So it is certainly something to watch out for and that it is why it is even more important for all Europeans, who might not think that the European Union is perfect — of course it is not — but who fundamentally believe that this is the way we solve our common challenges and that these people massively go and vote for the European Parliament,"

Read more: European elections 2019: What happened this week?

Malmstrom, who has been a commissioner for the past two terms — first for Home Affairs and then Trade — announced that she will not hold another portfolio: "I am leaving politics for now, I will do something totally different."

She, however, urged for more female representation at the higher echelons of European decision-making, saying that "it has been high time for a long time" for a woman to assume the presidency of one of Europe's institutions.

"We have a high representative, Mrs Federica Mogherini, who is the high representative (for Foreign Affairs), that’s good, she is doing a formidable job but, yes, I think that at the European Council or the Commission, there should be a woman heading that. It is high time, absolutely," she enthused.

Watch Cecilia Malmstrom's full The Global Conversation interview in the player above.