Zippyjuan
07-25-2018, 05:32 PM
In light of the "tariff breakthrough" announced today, this is what could have been if Trump had continued with the TTIP treaty.
The TTIP negotiations entered a decisive phase on 15 October 2015. That’s when US and EU negotiators laid their cards on the table, exchanging offers for tariff reductions. Up until then, the US had only broached hypothetical reductions; now they were openly offering to reduce 87.5 percent of all tariffs to zero.
That was more than the EU expected. European negotiators had to come up with a better offer or risk derailing the deal. A week later, they came up with a new deal: cutting 97 percent of tariffs to zero.
The EU’s secret offer, which website Correctiv has seen in its entirety, is made up of 181 pages of densely-printed text. It’s got almost 8,000 categories: every species of fish, every chemical has its own tariff category. Importing a parka? Its tariff will depend on whether it's wool, or polyester for example.
Trade deals are like poker games. Europe’s big offer comes with a big hope: that the US will open up its public bidding process to European firms. That way, European construction companies like Hochtief could bid on contracts to build US highways, or BMW could sell cop cars to American sheriffs.
Meat is 'underdog'
For the first time, the tariff offer makes clear what TTIP might do for consumers. Remove duties, and prices tend to drop. With tariffs on parts gone, cars could get cheaper. Per part, tariffs add just a few cents on the euro, but altogether European car manufacturers could save a billion euros each year, according to German Association of the Automotive Industry calculations. Manufacturers could then pass the savings on to consumers.
Some duties are levied on foodstuffs. Right now, peppers from the US have an import tariff of up to 14 percent. Fish caught on US coastlines are charged up to 25 percent; raspberries 9 percent. Take those away, and it could make economic sense for American food producers to export to the EU – putting domestic farmers under pressure.
Grain and meat, on the other hand, are largely left out of the reductions for now. “The meat industry is definitely an underdog,” says Pekka Pesonen, general secretary of the European Farmers Association (COPA-COGECA). Animal feed is produced much more cheaply in the US than in the EU. And for products like meat, “there are a lot of reasons it’s complicated to fully liberalise trade,” Pesonen says – animal welfare is more regulated in Europe, and using growth hormones is forbidden.
Opening the agricultural market completely would be difficult for Europe’s small family farms in particular, as they already struggle to compete against industrial-scale farms. That means the back-and-forth over grain and meat is likely to continue.
But the EU has to make a few offers here, too, because the US is eager to see the European agricultural market open up a bit. Pork or seed corn, for example, could be offered up for tariff cuts. The EU has yet to decide when the tariff cuts come into effect. The process is alarming for farmers, who aren’t eager to have their products used as negotiation tools.
More details at link. https://euobserver.com/economic/132376
The TTIP negotiations entered a decisive phase on 15 October 2015. That’s when US and EU negotiators laid their cards on the table, exchanging offers for tariff reductions. Up until then, the US had only broached hypothetical reductions; now they were openly offering to reduce 87.5 percent of all tariffs to zero.
That was more than the EU expected. European negotiators had to come up with a better offer or risk derailing the deal. A week later, they came up with a new deal: cutting 97 percent of tariffs to zero.
The EU’s secret offer, which website Correctiv has seen in its entirety, is made up of 181 pages of densely-printed text. It’s got almost 8,000 categories: every species of fish, every chemical has its own tariff category. Importing a parka? Its tariff will depend on whether it's wool, or polyester for example.
Trade deals are like poker games. Europe’s big offer comes with a big hope: that the US will open up its public bidding process to European firms. That way, European construction companies like Hochtief could bid on contracts to build US highways, or BMW could sell cop cars to American sheriffs.
Meat is 'underdog'
For the first time, the tariff offer makes clear what TTIP might do for consumers. Remove duties, and prices tend to drop. With tariffs on parts gone, cars could get cheaper. Per part, tariffs add just a few cents on the euro, but altogether European car manufacturers could save a billion euros each year, according to German Association of the Automotive Industry calculations. Manufacturers could then pass the savings on to consumers.
Some duties are levied on foodstuffs. Right now, peppers from the US have an import tariff of up to 14 percent. Fish caught on US coastlines are charged up to 25 percent; raspberries 9 percent. Take those away, and it could make economic sense for American food producers to export to the EU – putting domestic farmers under pressure.
Grain and meat, on the other hand, are largely left out of the reductions for now. “The meat industry is definitely an underdog,” says Pekka Pesonen, general secretary of the European Farmers Association (COPA-COGECA). Animal feed is produced much more cheaply in the US than in the EU. And for products like meat, “there are a lot of reasons it’s complicated to fully liberalise trade,” Pesonen says – animal welfare is more regulated in Europe, and using growth hormones is forbidden.
Opening the agricultural market completely would be difficult for Europe’s small family farms in particular, as they already struggle to compete against industrial-scale farms. That means the back-and-forth over grain and meat is likely to continue.
But the EU has to make a few offers here, too, because the US is eager to see the European agricultural market open up a bit. Pork or seed corn, for example, could be offered up for tariff cuts. The EU has yet to decide when the tariff cuts come into effect. The process is alarming for farmers, who aren’t eager to have their products used as negotiation tools.
More details at link. https://euobserver.com/economic/132376