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Comment: Trump’s cartoon-strip caricatures of EU threaten transatlantic ties

President Donald Trump’s anti-EU views are a dangerous departure from established US foreign policy and a threat to transatlantic trade relations, argues Anthony Gardner.

 

Some 16 months into the Trump administration, one can predict that US-EU relations will be significantly damaged. President Donald Trump’s own statements make clear that he sees the European Union as a club established exclusively to beat the United States in trade and as a vehicle of German power. He believes the EU is an ineffective, protectionist and bureaucratic organisation that Washington should sideline in its search for bilateral ties with individual European member states.

 

These views are cartoon-strip caricatures that are a dangerous departure from established US foreign policy. While EU sceptic Steve Bannon has left the White House, John Bolton, the new national security adviser, is likely to confirm Trump’s anti-EU convictions.

 

For decades prior to this administration, the US partnered with the EU on three areas of regional and global importance. The first related to “caring for the planet” and covered matters such as climate change, foreign aid and humanitarian assistance, and good governance/human rights. The second, economic ties, involved issues such as trade, data privacy and the digital economy. The third dealt with security and consisted of topics such as energy security, law enforcement and military cooperation.

 

The Trump administration is causing significant damage on almost all these issues. A decision to withdraw from the Iran nuclear agreement, for instance, would lead to significant transatlantic tensions.

 

The cons outweigh the pros

 

But the damage may be the greatest in the area of trade policy. It is true that Europe benefited from the Trump administration’s withdrawal from the Trans-Pacific Partnership, because the pullout accelerated the EU’s trade agreement with Japan. Indeed, US exporters will be disadvantaged compared with EU exporters in accessing the Japanese market.

 

While the White House attacks every trade deal signed by Trump’s predecessors, the EU has seized the opportunity to upgrade its accord with Mexico and is on the way to negotiating pacts with Australia, New Zealand and Mercosur. And the bloc is also grabbing the opportunity to project its rules on the world trading system in areas such as data privacy, investor-state dispute settlement, intellectual property (geographic indications) and a host of agricultural issues.

 

But Washington’s trade policies hurt the EU more than they help because the bloc is a rules-based organisation whose external trade policy is a cornerstone of its mission. Most significantly, the EU is concerned about the constant attacks on the multilateral rules-based system. Trump inexplicably considers the US to be a victim, rather than a beneficiary, of this system; he views trade as a game where only one side can win, and hence deficits as de facto evidence of cheating.

 

If the White House continues to block efforts to fill vacant seats on the World Trade Organization’s Appellate Body, the system will soon cease to function. Although the US is effectively holding the WTO hostage to its demands for reform, it hasn’t articulated what those demands are. EU Trade Commissioner Cecilia Malmström has warned that Washington is “killing the WTO from inside”.

 

Litigation on metals duties could ‘rip WTO apart’

 

The Trump administration says it doesn’t consider WTO rulings binding and would feel free to ignore adverse rulings. The US has also indicated that it would seek to settle trade disputes largely outside the multilateral system. This includes unilaterally imposing restrictions by using statutes rarely used in the past, such as Section 232.

 

The EU considers the invocation of a ‘national security’ exemption as a flimsy justification to impose steel and aluminium tariffs. Most of the steel is being imported from allies at a time of peace; dumping duties already curb Chinese exports to the US market, and levies on aluminium – for which the US depends far more on foreign supplies – are oddly lower than those for steel. Litigation about this exemption could rip apart the WTO, because a decision either way could cause bitter controversy. Merely invoking this exemption may tempt other countries to do the same.

 

Escalating trade frictions with the EU are likely. It is unclear that the temporary exemption from tariffs that Trump has granted to the bloc will be extended (again) beyond 1 June. Malmström insists that Europe won’t offer any concessions in exchange for an extension of the exemption. So it appears possible that the EU may impose retaliatory sanctions, and some of them would take immediate effect.

 

The EU has also made clear that it won’t negotiate a bilateral free trade agreement while it is under threat. The sad possibility, therefore, is that rather than cooperating on matters of joint concern – including on trade issues such as dumping, subsidies, intellectual-property theft and excessive production of raw materials – the US and the EU will be in conflict.

 

 

Anthony Luzzatto Gardner (@tonylgardner) was US ambassador to the European Union from March 2014 through January 2017.

 

Opinion pieces published on Borderlex are those of their authors only.

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