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Quick roundup of recent trade policy news: US, China, Turkey

It’s been an eventful one and a half days on the foreign policy front – with significant implications for EU trade policy

Here a little ‘quick and dirty’ update on where things stand.

Airbus and steel and aluminium disputes on the immediate agenda of EU & US

New USTR Katherine Tai talked to many ‘allies’ on her second formal day of work on Monday (22 March 2021).

Tai talked to European Commission vice-president Valdis Dombrovksis on trade matters. The two sides did not take out exactly the same conclusions from their meeting.

USTR readout: “They committed to strengthening US-EU cooperation on shared objectives, including trade policy support to address climate change, forced labor and issues related to large non-market economies, such as China. They also discussed their strong interest in resolving the dispute related to large civil aircraft subsidies and addressing global steel and aluminum overcapacity. Ambassador Tai and Executive Vice President Dombrovskis agreed to regular engagement on key issues, including WTO reform.”

EU readout : “They agreed on a number of shared goals, such as ensuring that trade supports efforts to tackle climate change and addressing wider sustainability issues such as forced labour related to China.”

“They both restated their commitment to quickly resolve ongoing disputes, notably those linked to large civilian aircraft and on tariffs on steel and aluminium. Executive Vice-President Dombrovskis and Ambassador Tai agreed to work jointly on WTO reform and other issues of common interest, such as trade and technology.”

Katherine Tai also talked to the UK’s Liz Truss – parallel agendas with EU?

Here one sees some parallels with the approach to the EU, but not only.

USTR readout: “They agreed to work constructively to address unfair trade practices of non-market economies, such as China. They also agreed to partner on key issues, including ending the COVID-19 pandemic, resolving the large civil aircraft subsidies dispute, WTO reform, climate change, forced labor and support for a worker-centered trade policy. »

“Ambassador Tai discussed her ongoing review of the US-UK free trade agreement negotiations conducted under the previous administration”

UK readout: “They agreed to work constructively to address unfair trade practices of non-market economies, such as China. They also agreed to partner on key issues, including ending the COVID-19 pandemic, resolving the large civil aircraft subsidies dispute, WTO reform, climate change, forced labor and support for a worker-centered trade policy. “

Ambassador Tai discussed her ongoing review of the US-UK free trade agreement negotiations conducted under the previous administration.”

Katherine Tai further talked to Ngozi Okonjo-Iweala on WTO issues

USTR readout: “The Ambassador emphasized the Administration’s commitment to working with Director General Okonjo-Iweala to enhance the global response to COVID-19 and ensure widespread access to vaccines. They also discussed the upcoming 12th Ministerial Meeting and how WTO reform can meet the needs of Members.”

Commission, EEAS recommend re-engagement with Turkey on customs union

EU-Turkey political relations reached new lows. A joint Commission and European External Action Service report requested by member states ahead for the Foreign Affairs Council meeting held on Monday takes stock of the entire relationship.

Extracts from the trade and economic integration aspects of the report.

“After an initially positive trend of increased Turkish alignment to the customs union rules, Turkey has been diverging in an increasingly systemic fashion from these rules over the past years,” the report reads.

At issue: “additional customs duties levied on third country imports (even when imported from the EU)”, “surveillance measures, requiring disclosure of sensitive data, discrimination against EU tractor producers, and excessive testing and certification”. Further “Turkey has concluded trade agreements not in line with those of the EU, despite its obligation under the customs union to do so.”

In terms of recommending a way forward, the institutions argue in favour of conditional re-engagement on a 2014 project to modernize the EU-Turkey customs union. “

“(M)odernisation and expansion of the scope of the current EU-Turkey Customs Union as already proposed by the Commission (…) would also provide a guiding framework for economic reforms in Turkey. EU capitals “should agree on the negotiating directives and authorise the Commission to open negotiations for this modernisation, provided that Turkey takes concrete steps in resolving the current trade irritants.”

European Parliament suspends scrutiny of EU-China Comprehensive Agreement on Investment

The EU, in a coordinated move with the United States, Canada and the United Kingdom put five Chinese officials on a list of persons targeted for severe human rights violations related to the Uïghur minority.

Beijing responded immediately with travel bans on EU scholars, MEPs and members of the Council of the European Union.

The European Parliament had started a scrutiny process in view of ratifying the Comprehensive Agreement on Investment inked between the EU and China at the end of 2020. MEPs were ready to consider the deal – seen as an improvement in what is perceived as an imbalanced EU China economic relations but would only contemplate if the EU upped its game in protecting itself against other distortions and strategic dependencies on China, plus make a stand on human rights. That would have taken time anyway. Now the process is suspended – until further notice.

 

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