EU ready to open talks with US to fix trade row

Metal coils at the ArcelorMittal steel plant in Ghent, Belgium. The EU will begin charging import duties of 25 per cent on a range of US products today, in response to US tariffs imposed on EU steel and aluminium early this month. PHOTO: REUTERS

Bloc's trade commissioner voices concern that current situation could escalate into 'full trade war'

WELLINGTON • The European Union is ready to engage with the United States to solve a trade row triggered by its decision to impose tariffs on European metals, EU Trade Commissioner Cecilia Malmstrom said yesterday.

Describing the US tariffs as "illegal" and contravening World Trade Organisation (WTO) rules, Ms Malmstrom said there was no choice but to take retaliatory action to protect European interests and jobs.

"We think it is ridiculous to consider the EU as a threat to US national security," she told a seminar in New Zealand.

"We are always open to talk with the US. The whole EU is based on the idea that we talk."

The EU will begin charging import duties of 25 per cent on a range of US products today, in response to US tariffs put on EU steel and aluminium early this month, Ms Malmstrom said.

The US, after imposing punitive tariffs on a number of its top trading partners, this week threatened China with further duties on US$200 billion (S$272 billion) worth of trade, escalating a conflict that has already drawn retaliatory steps from around the world.

Visiting New Zealand to begin talks on a free-trade agreement, Ms Malmstrom sought its support to stand up for an open, rules-based trade system that she said was under threat from friction between the US and other major economies.

Ms Malmstrom said she was "very worried" about the situation, as it could escalate into a "full trade war" that would disrupt global supply chains and damage the world economy.

She also took a swipe at US President Donald Trump's protectionist policies, voicing concern that some countries were "acting outside" rules agreed upon jointly at the WTO.

"New Zealand is a friend, an ally. Together, we stand up for common values... of sustainable trade, open trade, transparent trade, and trade that is done in compliance with international rules in the multilateral system," she told a news conference after meeting New Zealand Trade Minister David Parker.

Ms Malmstrom said that while WTO rules were not perfect, they have served the global economy well and benefited countries including the US. "It is not dying, but it is in need of modernisation," she added.

Despite the frictions with the US, the EU did share its criticism that China was dumping steel and aluminium goods by subsidising state-owned companies, Ms Malmstrom said, adding that Beijing's move was causing "great instability"in global markets.

"We don't like that. Nobody likes that. We need to address this issue. But just throwing tariffs to the whole world is not the right way to address it."

New Zealand is a strong advocate of free trade, and pushed hard with Japan for renegotiating a Trans-Pacific Partnership deal after Mr Trump's decision to pull the US out of the pact.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on June 22, 2018, with the headline 'EU ready to open talks with US to fix trade row'. Print Edition | Subscribe