With Great Britain (UK) making its “Brexit” at the end of the year, the door is open to trade possibilities with both the UK and the European Union (EU). The Trump Administration has made agreements with both a top priority for 2020. The Administration is willing to levy tariffs on the EU as early as the 14th of this month to bring them to the table. The practice of tariffs is not a new tactic for the Administration; they used them to get trade deals with China, Mexico, and Canada.
One of the major sticking points with the European Union has been over the topic of agriculture. The EU had made numerous statements that they were not willing to negotiate and changes to agricultural trade in a new agreement, and why would they? The European Union currently enjoys a surplus of agricultural exports to the United States to the tune of $12 billion.
There seemed to be a glimmer of hope, last month when the European Union looked like it might soften its stance on the subject of negotiation on agricultural trade. However, over the weekend, they once again took up their hard-line stance on no negotiation over agriculture. The EU’s Chairman of the Committee on International Trade, Bernd Lange visited the U.S. and told the Trump administration and senior lawmakers that negotiation on ag was “not possible.” Lange was in town to try to jumpstart trade negotiations between the EU and the U.S.
Lange visited with Iowa Senator Chuck Grassley’s office and reiterated their unwillingness to budge on agriculture. Grassley’s staff told Lange that any trade deal had to include agriculture. This is completely against what EU Trade Commissioner Phil Hogan said during his recent trip to the states.
Telling Iowa’s Senior Senator that you will not negotiate on agriculture takes some serious guts. Grassley visited with Ag reporters on Tuesday. He says that the European Union’s push to negotiate quickly might be an example of them playing defense on trade. Grassley says that we are more interested in our separate trade deal with Great Britain, and the European Union doesn’t want to fall behind. However, an unwillingness to negotiate trade will do nothing but put them behind a UK deal which will likely include agricultural considerations.
The United States is not the only country the EU is taking this hard-lined stance with; they are also showing the same inflexibility with the United Kingdom. Grassley says this could bode well for the U.S. on a UK trade deal. British Prime Minister Boris Johnson says he has no qualms about a “no-deal Brexit.” That would put the EU further behind the eight ball with both the United States and the United Kingdom. That is something that Senator Grassley feels the EU will want to avoid.
House Democrats are also watching these developments rather closely as they have said that any hard trade borders between the United Kingdom and the Republic of Ireland, who is still a European Union member, will make any trade negotiations even more sticky. The next few days, weeks, and months are going to be interesting, on many fronts, as it pertains to trade between the U.S., UK, and EU.