BRUSSELS (REUTERS) - A US-EU deal on trade should give the European Union at least four months of respite from transatlantic tensions, crucially pushing past the US mid-term elections, a senior EU official said on Thursday (July 26).
US President Donald Trump and European Commission chief Jean-Claude Juncker agreed on Wednesday (July 25) to remove duties on industrial goods and boost US soybean and energy exports to Europe, while working to resolve their tariff dispute.
The pair agreed to set up a group of close advisers, which is to drive forward their plans with the production of a report in the next 120 days.
"In terms of timing, 120 days means the end of November, rather than the end of October, which would have been ahead of a certain election date," the official said.
Trump has imposed import tariffs on steel and aluminium and threatened to extend them to cars before US mid-term elections on Nov 6 that will determine whether the Republican Party retains control of Congress.
The measures are part of Trump's "America First" promise to win back manufacturing jobs lost to overseas competitors.
The EU official said the European Commission, which negotiates EU trade deals, would still need backing of the 28 members it represents and that could take a "a few months".
Wednesday's joint statement referred to the goal of zero tariffs on "non-auto industrial goods", but the European Union believes a final deal will contain cars, a key focus of Trump's complaints that Europeans are trading unfairly.
Trump expressed a preference in the meeting for car tariffs to fall to zero, the EU official said. However, the United States protects its truck makers with higher import duties and typically only includes trucks in free trade agreements with a long transition.
"Let's see what will happen, but it would not be imaginable to have elimination of industrial tariffs without mentioning cars," the EU official said.
Furthermore, under World Trade Organization rules, free trade deals need to cover "substantially all trade", typically meaning at least 90 per cent of trade. Cars would need to be included to pass that level, the EU official said.
The prospect of an agreement to remove tariffs on industrial products has drawn parallels with the planned Transatlantic Trade and Investment Partnership (TTIP), a target of widespread protests in Europe and abandoned after Trump's 2016 election victory.
The European Commission has insisted that the new plan should not be considered a resurrection of TTIP or a mini-TTIP.