ISSN 2330-717X

Farming Chiefs Meeting Signals Thaw After EU-US Trade Row

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By Gerardo Fortuna and Natasha Foote

(EurActiv) — A meeting between EU Agriculture Commissioner Janusz Wojciechowski and US agriculture secretary Tom Vilsack showed the first signs of thawing relations after the trade dispute that has soured transatlantic relations in recent years.

On Tuesday (9 March), the two agriculture bosses had a phone call to relaunch an “active bilateral cooperation” aimed at ensuring global food security and making agriculture more climate-friendly.

The meeting was held just a few days after Washington and the EU called for a four-month suspension of retaliatory tariffs stemming from WTO disputes over government subsidies to aircraft manufacturers Airbus and Boeing.

“Prospects for constructive cooperation are looming and a good signal is the suspension of US food tariffs from the EU introduced in 2019,” Wojciechowski commented after the meeting on his Twitter account.

Both leaders recognised the importance of a free and fair trading system that will not only strengthen domestic economies but also help meet the goals of global food security, a US spokesperson said.

According to a diplomatic source familiar with the situation, Vilsack stated that he looks forward to a positive working relationship with the EU in finding positive solutions to challenges facing agriculture, and address longstanding issues.

The discussion also focused on rural economies and the environment, while Vilsack emphasised the importance of respecting different approaches to achieving climate-related goals in agriculture that promote innovation and utilize new technologies.

In an opinion piece published on EURACTIV in February 2020, Vilsack’s predecessor, Sonny Perdue, urged the EU to remove constraints to the adoption of innovative new approaches and technologies, including overly burdensome and unnecessary regulatory restrictions.

Tariff reprieve

In October 2019, the US announced punitive tariffs on EU agri-food products after the World Trade Organisation (WTO) ruled in their favour over EU subsidies for the European aircraft manufacturer Airbus.

The tariffs were enacted last March, concerning imports of EU products worth a total of €6.8 billion and ranging from Italian cheeses to French wines and Scotch whisky.

In retaliation, the EU has been imposing customs duties on $4 billion of American exports since the beginning of November.

In a letter sent to trade Commissioner Valdis Dombrovskis on the day of Joe Biden’s inauguration, the chair of the European Parliament’s agriculture committee, Norbert Lins, asked the European Commission on behalf of the majority of political groups “to intervene directly” in the dispute.

On Friday (5 March), the EU and the US announced a four-month tariff reprieve of the tariffs.

The news was eagerly anticipated by the agrifood sector, which has been disproportionately affected by the dispute.

Reacting to the news, Wojciechowski called the suspension “good news for European farmers” regarding world markets, while EU farmers’ association COPA-COGECA stressed that the move is of particular importance for the EU and US farming sectors.

In a statement, the farmers’ lobby stressed that European farmers and agri-cooperatives now encourage both partners to “use these four months to find a permanent solution while avoiding causing agriculture to pay a high-price for a conflict they are not involved in”.

“The EU and US have a common interest to work together on reforming the WTO, with possible new ideas on international trade disciplines, for instance in the area of Carbon Border Adjustment Mechanism, implementation of the Paris Climate Agreement and a well-functioning dispute settlement body,” they added.

The European alcoholic beverage sector also rejoices, as the United States is the biggest importer of their products.

The EU’s liquor lobby, the Distilled Spirits Council, called the decision “a promising breakthrough in the longstanding trade dispute on civil aircraft subsidies, which has left much destruction to the spirits sector in its wake.”

The deal would suspend a 25% tariff imposed by Europe on American rum, brandy and vodka, as well as a 25% tariff the United States imposed on liqueurs and cordials from Germany, Ireland, Italy and Spain, as well as on Cognacs and other grape brandies from France and Germany.

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