The United States is turning inward. Pressure is on the EU to step in and support the World Trade Organization and the multilateral trading rules that it sustains.
EU member states have asked the Commission to draw up plans on how to respond to a possible United States Border Adjustment tax. The tax, which under current plans aims to deter imports and boost exports, could destabilise trade with the EU.
The EU is exploring options such as filing a WTO dispute settlement case or introduce trade defence measures.
These are the main topics trade ministers will talk about at an informal meeting in Valletta, Malta, on Friday 3 March 2017. Ministers will also meet with Roberto Azevêdo, the WTO’s freshly reappointed chief.
Ministers in Valletta will also discuss EU plans to overhaul its trade defence legislation. China will no longer be treated as a non market economy. But the EU is seeking for ways to respond to situation such as massive industrial overcapacities leading to import surges.
Pressure is on the deeply divided member states to come up with a solution, as the EU is seeking to work closer together with China in a world shaped by a more protectionist-leaning United States.
Another consequence of Donald Trump: the EU is seeking to accelerate its free trade negotiations with other countries across the world. It is doing so with Latin America, but also with South and South East Asia.
Early March, trade commissioner Cecilia Malmström will travel to South East Asia, visiting Singapore and meeting her ASEAN counterparts in the Philippines.
Another two files to watch in March: the UK is planning to formally notify the EU of its intention to leave the bloc on 9 March 2017. The date is not fully set in stone as the two Houses of Parliament in Britain are still working on the EU Withdrawal Bill that would give Prime Minister May the powers to trigger Article 50.
Sometime in March, the Court of Justice of the EU is also expected to give a verdict on the EU Singapore FTA. The ruling will be help shape the future of EU trade policy as it will help determine the division of powers between the EU and the member states on trade. Hopefully it will make adopting EU trade agreements easier in future.
We will be following these news daily on borderlex.eu.