MNI INTERVIEW: MEPs Pressure EC To Win US Tariff Concessions

The European Commission failed to fully exploit the trade powers it has under EU law in its framework trade agreement with the U.S. and the European Parliament will continue pushing Brussels to try and carve out more industries from the 15% tariffs imposed under the deal with Washington, a leading trade voice in the assembly told MNI.

Brando Benifei, chair of the EP's Delegation for Relations with the United States, said the Commission was too swayed by pressure from "some countries" to clinch a fast deal and that, although the 15% across-the-board deal is a better outcome than for many other countries, "it is lacking enough exemptions for our most important goods."

He noted that the atmosphere among the EP's various political groups is "very negative" regarding the terms. All the main groups have conveyed to the Commission that the deal is "not sufficiently acceptable" as it stands. 

Under the legal approach adopted by the Commission, the assembly will need to approve it by a simple majority when the vote is held in the coming months.  "It will be a difficult discussion," he said. 

EXEMPTIONS SOUGHT

To ease the deal’s passage through the EP, Benifei urged the Commission must do its best during the ongoing talks on the EU-US joint statement to secure further exemptions from tariffs and clarify other important aspects of the agreement to reassure businesses across the bloc.  

Currently, the agreement only allows exemptions for aircraft and aircraft parts, certain chemicals and some generic drugs, Benifei noted, adding that assurances are needed on exports subject to a US Section 232 national security investigation such as pharmaceuticals and semiconductors to ensure that tariffs will stay at the 15% threshold once the probes are concluded. 

He also expected the Commission to make a further attempt to exempt wines and spirits from U.S. tariffs to placate a furious backlash against the deal in France.

PHARMA AND FARMERS

Even with a 15% tariff, Benifei highlighted the challenges for the EU pharmaceutical sector’s ability to compete. "Maybe in other sectors that could be absorbed more easily. For pharma I understand it is quite a problem," he said. 

Clarification is also needed on steel where the U.S. needs to confirm that the current 50% US tariff will be reduced as soon as the EU and US have agreed the promised tariff rate quotas, although Benifei notes there are no guarantees of quotas.

Tariffs on some agricultural goods have also produced an unsatisfactory situation for European farm exporters, he adds. 

"We see in agriculture it's 15% but there are goods facing higher tariffs based on pre-existing rules (such as longstanding Most Favoured Nation tariffs), so that which is higher will stay higher," he said 

Playing down the EU's pledge to increase purchases of U.S. energy and boost investments in the US, Benifei said that these aspects of the deal are more of a political commitment. 

"Trump was very keen on investments and energy so it was important to put them in the deal, but I am not sure this is a very reliable part of the deal," he said.