During last year’s presidential election, Joe Biden promised to end America’s “artificial trade war” with Europe. His predecessor, Donald Trump, had imposed $7.5 billion worth of tariffs on European aluminum and steel.
Biden has relaxed the tariffs, but not abolished them. The EU has completely pulled down its retaliatory tariffs on bourbon whisky and Harley-Davidson motorcycles.
Less than a year ago, Mark Rutte and Pedro Sánchez were on opposite ends of the debate about the EU’s coronavirus recovery fund. Sánchez and other Southern European leaders called for grants financed by EU-issued bonds. Rutte and his allies preferred loans. The two sides eventually split the difference.
Now the two prime ministers, one center-right, the other center-left, have made common cause for a version of European “strategic autonomy” that is more liberal than Emmanuel Macron’s.
I haven’t read the 1,246 pages of the EU-UK trade agreement, so I’m going to rely on trusted sources to make sense of the accord.
First, a couple of notes on terminology.
This treaty, the EU-UK Trade and Cooperation Agreement, governs the future cross-Channel relationship. It is due to go into effect on January 1, although it will still need to be ratified by the parliaments of the European Union and the United Kingdom as well as the European Council.
Last year’s withdrawal agreement regulated Britain’s exit from the EU. It provided for a one-year transition period, which expires on December 31, and included a protocol for Northern Ireland, which keeps the province in the European single market for goods and effectively (but not legally) in the EU customs union to avoid the need for a border with the Republic of Ireland.
Both treaties have been unhelpfully referred to as “the deal” in the English-speaking press, but only the withdrawal agreement was crucial. The trade agreement, while good to have, since Britain does most of its trade with the EU, was always optional. Read more “What to Make of the EU-UK Trade Agreement”
Emmanuel Macron and Mark Rutte belong to the same European liberal family, but they take different views on the future of the liberal world order.
The French president believes Europe should become less reliant on the United States and foreign trade. He argues for “strategic autonomy” in everything from the digital economy to defense to environmental policy.
The Dutch prime minister has doubts, rooted in decades of Dutch Atlanticism and centuries of overseas trade.
Both have allies.
Macron has the support of German chancellor Angela Merkel and European Commission president Ursula von der Leyen, a former German defense minister.
Rutte is backed by smaller countries in Central and Northern Europe as well others in the European Commission. The Financial Times reports that plenty suspect “strategic autonomy” is a fancy way to dress up French protectionism; are wary of formally endorsing the principle if it means undermining NATO and open trade; and are skeptical of the push for reshoring of industry and supply chains.
First tiny Wallonia threatened to derail the EU’s free-trade agreement with Canada. Now Cyprus, with a population of 1.2 million, is putting at risk a treaty that covers nearly 500 million consumers and 28 percent of the world’s economy.
Cypriot lawmakers voted 37 to eighteen against the Comprehensive Economic and Trade Agreement (CETA), which eliminates nearly all tariffs between Canada and the EU and includes mutual recognition of professional qualifications and product standards.
Kosovo’s new prime minister, Albin Kurti, is partially lifting his predecessor’s 100 percent import tariff on Serbian goods. He has offered to lift the tariff completely if Serbia suspends its derecognition campaign. If it fails to reciprocate, the tariffs will be restored in June.
Dutch parliamentarians narrowly approved an EU trade agreement with Canada on Tuesday, but ratification of the treaty faces an uphill battle in the Senate, where Prime Minister Mark Rutte’s ruling parties do not have a majority.
If the pact isn’t supported by the Netherlands — one of the EU’s most liberal and free-trading nations — it would call the bloc’s ambition to uphold the global trade regime in lieu of American leadership into doubt.