EU states approve new talks on US trade deal

EU member states have agreed to the launch of negotiations on a trade deal with the United States, according to EU sources, in a move that the bloc hopes will prevent US President Donald Trump from pressing ahead with threatened car import tariffs.

EU ambassadors gave their "agreement in principle" for EU Trade Commissioner Cecilia Malmstrom to negotiate a deal with Washington, a source said on condition of anonymity. A majority of member states is due to formally adopt the decision on Monday.

This would pave the way for formal talks to begin soon, another source said, noting that only logistical hurdles remain on the EU side, while Washington is in the starting blocks.

The European Commission has been pressing since January 2019 for negotiations to start on a limited EU-US trade deal, but member states such as France hesitated due to domestic opposition, worrying that the issue was too sensitive ahead of EU elections in May.

The EU-US trade relationship has been tense since Trump raised steel and aluminium import tariffs last year, prompting Brussels to retaliate with several measures.

In July, Trump and EU Commission President Jean-Claude Juncker agreed to work on lifting tariffs for industrial goods, as well as whittling down trade barriers in several sectors, in an effort to ease the tensions. But since then, Washington has accused Brussels of foot-dragging and Trump has threatened to impose high tariffs on EU automotive exports in case of lacking progress.

In February, the US Commerce Department presented Trump with its findings after being asked whether any imbalance in the car trade harmed US national security - an assessment that would justify special tariffs. Trump has 90 days from the completion of the report - which is still confidential - to implement the tariffs.

There is currently a 2.5-per-cent tariff on cars imported into the US. Trump has hinted that he could raise this to 25 per cent.

The EU Commission's negotiating proposal focuses on abolishing tariffs on industrial goods, including cars and car parts. It would leave agricultural duties unchanged, however, contrary to US demands.

EU officials have stressed that the proposal cannot be compared to the stalled Transatlantic Trade and Investment Partnership that Washington and Brussels had begun negotiating under former US president Barack Obama. At the time, it came under fierce criticism from free trade opponents, leading to widespread protest across parts of Europe.

EU trade talks are a responsibility of the European Commission, which negotiates collectively on behalf of all member states. However, they have to grant it a mandate to strike any new trade deals.

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