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U.S., EU agree to ease trade tensions
Why it is in news?
- U.S. President Donald Trump and European Commission chief Jean-Claude Juncker on Wednesday agreed on a plan to defuse the festering trade dispute between the two major economies.
Trade statistics
- U.S. goods and services trade with the EU totaled nearly $1.1 trillion in 2016. Exports totaled $501 billion; Imports totaled $592 billion. The U.S. goods and services trade deficit with the EU was $92 billion in 2016.
- The EU countries, together, would rank 1st as an export market for the United States in 2016.
- The EU countries together, would rank as the 2nd largest supplier of imports to the United States in 2016.
- The U.S. goods trade deficit with the EU was $146.8 billion in 2016, a 5.7% decrease ($8.9 billion) over 2015 The U.S. goods trade deficit with the EU accounted for 22.8% of the overall U.S. goods trade deficit in 2016.
- The United States has a services trade surplus of $54.8 billion with the EU in 2016, up 0.8% from 2015.
WTO reform
- Mr. Trump also won a commitment to work together to reform the World Trade Organization to address some of his complaints about China on theft of U.S. technology, the behavior of state-owned enterprises, and overcapacity in steel.
- He has long complained that the WTO has been unfair to the United States, despite the fact that the U.S. has won most of the disputes against China and others.
- The U.S. and EU account for about $1 trillion in transatlantic trade, and tensions spiked leading up to Wednesday’s high-stakes talks.
- EU imports 35% of its natural gas from U.S. producers.
Strengthen ties
- Germany’s Economy Minister described the agreement as a “breakthrough” that “can avoid trade war.
- The pair — who met for more than two hours of talks at the White House — also said they would work to “resolve” the existing duties on steel and aluminum imposed by Washington, which had angered key allies including the European Union.
- “We want to further strengthen this trade relationship to the benefit of all American and European citizens,” Mr. Trump said in a statement delivered from the White House Rose Garden.
- The outcome seemed a victory for Mr. Trump, who had assured supporters that his confrontational trade strategy would bear fruit, and who appears to have conceded little in the talks with the EU.
- The leaders agreed to “launch a new phase” in the relationship and “to work together towards zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods,” Mr. Trump said.
- In addition, the EU has made a commitment to buy U.S. soybeans and natural gas.
- While EU officials had threatened immediate retaliation to any auto tariffs, and said they would not negotiate with Washington under duress, they seem to have decided to appease the irascible U.S. leader.
Source
The Hindu