Europe is ready to resume talks with the United States about a transatlantic trade deal. But they may already be doomed.
EU member states voted Monday to open trade talks with the United States despite opposition from France, which objects to the US position on climate change and could scupper a final deal.
Cecilia Malmström, Europe’s top trade official, said she would reach out to the Trump administration “as soon as they wake up” to inform them of the outcome.
“We are ready [to start the talks] whenever they are,” she added.
However, a disagreement over agriculture could derail talks before they even start. The European Union says agriculture won’t be up for discussion, while the United States insists it must be part of negotiations.
The divisions underscore the difficulty of the task facing negotiators, and the complicated history of trade talks between the United States and Europe. The last push for a major trade deal — known as TTIP — ended in a stalemate in 2016.
“I think the EU side would be reluctant to refuse to talk but the obstacles to a successful agreement are even greater than under [President Barack] Obama,” said Peter Holmes, a trade expert and economics lecturer at University of Sussex.
The opposition in Paris
There’s a lot at stake. EU-US trade in goods and services is worth over $1.1 trillion a year. But French President Emmanuel Macron has already staked out his position on talks: Europe should not negotiate a trade deal with a country that is not part of the 2015 Paris Agreement on climate.
“It is a question of values: Europe must be exemplary and firm in its protection of climate,” a spokesperson for Macron said in a statement.
President Donald Trump announced in 2017 that the United States would withdraw from the accord. Macron argues that it wouldn’t be fair for only one party of a trade deal to follow the strict environmental standards agreed in Paris. France voted against opening trade talks on Monday, but was overruled by a majority of EU member states.
While France couldn’t prevent the start of trade discussions with the United States, it can block any deal that results. All EU member states must sign off on trade deals negotiated by the bloc.
“This fight will have to continue, particularly in the European Parliament, without which no trade agreement can be approved after the negotiations,” said the spokesperson for Macron.
The farming problem
The United States and the European Union are already at loggerheads over whether agriculture should be included in trade discussions.
The European Union is very protective of its heavily-subsidized agricultural sector. The United States, meanwhile, wants to break down tariffs and sell farm products in Europe.
It’s a highly emotional issue in many parts of the Europe, where voters fear that a trade deal with the United States would open their doors to genetically modified crops or chicken washed with chlorine.
The United States insists that if Europe wants a deal, it has to include agriculture.
“We’re working on other areas with the realization that there’s not going to be any [free trade agreement] without agriculture,” US Trade Representative Robert Lighthizer said last month.
Meanwhile, EU officials argue that agriculture has never been on the table.
When European Commission President Jean-Claude Juncker visited the White House last year, they point out, he and Trump only agreed to work toward eliminating tariffs and barriers on “non-auto industrial goods.”
The joint statement issued by the two leaders at the time made no mention of agriculture. On Monday, Malmström again cited the document in saying that agriculture would not be discussed.
Rising tensions
The disagreements follow a series of confrontations between the Untied States and Europe over trade.
Earlier this week, the Trump administration threatened to impose tariffs on European goods worth $11 billions over aircraft subsidies. The European Commission said it would seek to retaliate.
Trump is also considering whether to impose tariffs of up to 25% on European vehicle imports, with a decision due by the middle May.
He’s already imposed tariffs on European steel and aluminum exports. Europe retaliated with tariffs on more than $3 billion worth of American products such as motorcycles, orange juice, bourbon, cigarettes and denim.
