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Current Trade Matters


This issue presents a concise overview of the results of the EU-U.S. Summit which took place in Brussels on June 15. Heads of state discussed a range of issues, such as global recovery, healthcare, technology, security, climate and trade policy. Most importantly, the engagement of the parties involved signalized a renewal of the transatlantic partnership and a joint agenda to address the several challenges moving forward from the Covid-19 pandemic.

The June 15, 2021, EU-U.S. summit signaled the beginning of a renewed transatlantic partnership and set a common agenda for EU-U.S. cooperation in the post-pandemic era. Leaders committed to regular dialogue to take stock of progress. Charles Michel, President of the European Council, and Ursula von der Leyen, President of the European Commission, represented the EU. President Joe Biden represented the United States. It was the first EU-U.S. summit since 2014 and the first visit by a U.S. president to the EU institutions since 2017.

Among the critical outcomes of the summit were two major new trade initiatives. Leaders agreed on the following:

  • Establish a cooperative framework for wide-body civil aircraft
  • Launching talks to resolve disagreements on steel and aluminum measures by the end of the year
  • Establishment of an EU-US Trade and Technology Council

Leaders issued a joint statement at the conclusion of the summit.

Covid-19 & Global Recovery

Leaders highlighted the establishment of a Joint EU-US COVID-19 Manufacturing and Supply Chain Taskforce. The goal is to expand manufacturing capacity for vaccines and therapeutics by:

  • Building new vaccine and therapeutics manufacturing facilities
  • Maintaining open and secure supply chains
  • Avoiding unnecessary export restrictions
  • Promoting voluntary exchange of expertise and technology

The EU and the U.S. will intensify their cooperation on reforming the World Health Organization (WHO). Leaders welcomed the idea of assessing the merits of developing a WHO agreement, convention or other international instrument on pandemic preparedness and response.

The EU and the U.S. are committed to working together to advance a sustainable and inclusive global recovery from the crisis, in line with the United Nations 2030 Agenda for Sustainable Development. They will continue to support countries in need of assistance, address debt vulnerabilities, and stimulate domestic policy reforms and increased private investment.

Leaders agreed to establish a joint EU-U.S. working group on resuming non-essential safe and sustainable travel between the EU and the United States. They welcomed progress in discussions on allowing more EU member states to benefit from visa waivers for travel to the United States and agreed to continue this dialogue.

Trade, Investment & Technological Cooperation

The EU and the U.S. have the most extensive economic relationship in the world. They are determined to expand their bilateral trade and investment relationship and to maintain and reform the rules-based multilateral trading system. Leaders said they want to use trade to combat climate change, protect the environment, promote workers' rights, build resilient and sustainable supply chains, and create decent jobs.

To create an effective platform for cooperation, the leaders established a high-level EU-US Trade and Technology Council (TTC). The objectives of the TTC include:

  • Expanding bilateral trade and investment relations.
  • Avoiding unnecessary new technical barriers to trade
  • Strengthening global cooperation on technology, digital issues and supply chains
  • Cooperating on the development of compatible and international standards
  • Facilitating regulatory action
  • Promoting innovation and leadership by U.S. and European companies

In parallel with the TTC, the EU and US intend to establish a joint EU-US dialogue on technology-related competition policy. The focus will be on approaches to competition policy and enforcement, as well as enhanced cooperation in the technology sector.

As another result of the summit, there is also the prospect of a resolution to long-standing trade disputes.

  • Leaders welcomed agreement on a cooperation framework for wide-body civil aircraft, which heralds a new transatlantic relationship in this area.
  • They also agreed to begin talks to allow for the resolution of existing differences on steel and aluminum measures before the end of this year.

In addition, the EU and the U.S. are committed to promoting a fair, sustainable and modern international tax system and to working together to reach global consensus on the issue of taxation of multinational companies within the OECD by mid-2021.

Leaders also agreed to work together on efforts to achieve meaningful reform of the World Trade Organization (WTO).

EU and U.S. take decisive step toward ending aircraft dispute

European Commission Executive Vice President Valdis Dombrovskis and U.S. Trade Representative Katherine Tai reached an agreement on large civil aircrafts. This replaces nearly 17 years of disputes with a forward-looking platform for cooperation to resolve bilateral issues and address global challenges.

Both sides will now work to overcome long-standing differences to avoid future disputes and ensure a level playing field for our aircraft manufacturers. Work is also underway to prevent new disagreements from arising in the first place.

The EU and the U.S. also agreed to suspend $11.5 billion in tariffs harmful to businesses and people on both sides of the Atlantic for five years.

Both sides will cooperate to analyze and address non-market practices by third parties that could be detrimental to the transatlantic industry of large civil aircrafts.

As part of the agreement on a cooperative framework for large civil aircraft, both sides have indicated their intention to:

  • establish a Large Civil Aircraft Working Group to be chaired by the respective Ministers of Commerce
  • provide financing to manufacturers of large civil aircraft on market terms
  • allocate funds for R&D through an open and transparent process and make the results of fully government-funded R&D generally available, to the extent permitted by law
  • not provide R&D funding or specific support (such as tax incentives) to their own manufacturers that would harm the other side
  • cooperate in combating non-market practices by third parties that could harm EU and U.S. manufacturers of large civil aircraft
  • suspend the application of countermeasures for an additional 5 years to eliminate billions of dollars in tariffs for importers on both sides of the Atlantic

Further information can be found here.

Climate

The EU and the US are committed to the Paris Agreement and its effective and strengthened implementation. To create an effective platform for cooperation in this regard, the summit participants committed to establishing a high-level EU-US Climate Change Group.

They decided to cooperate even more closely on the transition to a carbon-neutral and resource-efficient circular economy. They intend to work toward a transatlantic green technology alliance that would promote cooperation in the development and deployment of green technologies, as well as markets for scaling such technologies

Global Governance & Security

The EU and the U.S. stand united in their desire to prevent and resolve conflicts peacefully, uphold the rule of law and international law, and promote human rights for all, gender equality and equity, and the empowerment of women and girls. Both partners intend to support democracy worldwide, including by defending media freedom, further developing a free and open Internet, promoting responsible behavior in cyberspace, and combating disinformation.

They decided to lead by example themselves and join forces at the Democracy Summit by committing to concrete actions to defend universal human rights, prevent backsliding on democracy and fight corruption.

The EU and the U.S. intend to consult closely and cooperate closely on the full range of issues affecting China, including aspects of cooperation, competition, and systemic rivalry. They also addressed a wide range of other pressing geopolitical, foreign policy, and security issues of common interest. Leaders reaffirmed their support for ongoing diplomatic efforts and negotiations in Vienna aimed at facilitating the U.S. return to the Iran nuclear agreement (Joint Comprehensive Plan of Action, JCPOA). Finally, they welcomed the fact that the U.S. has been invited by the EU to participate in the SSC project on military mobility. This is an important step toward a closer partnership between the EU and the U.S. in the areas of security and defense.

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