PARIS — Europe and the United States say progress has been made but there were no breakthroughs during a meeting in Paris to negotiate a settlement of a tense tariff spat with worldwide economic ramifications between two global economic powerhouses.
The European Union’s top trade negotiator, Maroš Šefčovič, met Wednesday with his American counterpart, U.S. Trade Representative Jamieson Greer, on the sidelines of a meeting of the Organization for Economic Cooperation and Development.
“I am pleased that negotiations are advancing quickly,” said Greer. He said the EU negotiators showed a “willingness by the EU to work with us to find a concrete way forward to achieve reciprocal trade. I look forward to continued constructive engagement in the coming days and weeks.”
“We’re advancing in the right direction at pace,” Šefčovič said at a news conference. He said ongoing technical meetings between EU and U.S. negotiators in Washington would be followed by a video conference between himself and Greer to “assess the progress and charter the way forward.”
Brussels and Washington are unlikely to reach a substantive trade agreement in Paris. The issues dividing them are too difficult to resolve quickly.
President Donald Trump regularly fumes about America’s persistent trade deficit with the European Union, which was a record $161 billion last year, according to the U.S. Commerce Department.
Trump blames the gap between what the U.S. sells and what it buys from Europe on unfair trade practices and often criticizes the EU’s 10% tax on imported cars. America’s tax on imported cars was 2.5% until Trump raised it to 25% in April. The EU has argued its purchases of U.S. services, especially in the technology sector, all but overcome the deficit.
After the Trump administration’s surprise tariffs on steel last week rattled global markets and complicated the ongoing, wider tariff negotiations between Brussels and Washington, the EU on Monday said it is preparing “countermeasures” against the U.S.
The EU has offered the U.S. a “zero for zero” deal which would see both sides end tariffs on industrial goods, including autos. Trump has rejected that idea, but EU officials say it’s still on the table.
The EU could buy more liquefied natural gas and defense items from the U.S., and reduce duties on cars, but it is not likely to budge on calls to scrap the value added tax, which is akin to a sales tax, or open up the EU to American beef.
“We still have a few weeks to have this discussion and negotiation,” French Trade Minister Laurent Saint-Martin said in Paris on Wednesday ahead of the OECD meeting. “If the discussion and negotiation do not succeed, Europe is capable of having countermeasures on American products and services as well.”
Greta Peisch, who was general counsel for the U.S. trade representative in the Biden administration, said the zero-for-zero proposal could provide a way to make progress if the Trump administration “is looking for a reason not to impose tariffs on the EU.’’
But Peisch, now a partner at the Wiley Rein law firm, wondered: “How motivated is the U.S. to come to a deal with the EU?’’ Trump, after all, has longstanding grievances and complaints about EU trade practices.
One target of his ire is the value-added tax, similar to U.S. state sales taxes.
Trump and his advisers consider VATs unfair protectionism because they are levied on U.S. products. But VATs are set at a national level, not by the EU, and apply to domestic and imported products alike, so they have not traditionally been considered a trade barrier. There is little chance governments will overhaul their tax systems to appease Trump.
Likewise, the Europeans are likely to balk at U.S. demands to scrap food and safety regulations that Washington views as trade barriers. These include bans on hormone-raised beef, chlorinated chicken and genetically modified foods.
“When you start talking about chickens or GMOs or automobile safety standards, you’re talking about the ways countries choose to regulate their economies,” said William Reinsch, a former U.S. trade official now with the Center for Strategic and International Studies. “We think that’s protectionist. They think it’s keeping their citizens healthy … It’s been a sore point for 60 years.’’