Commerce Secretary Says EU Announcement 'Vindication' of Trump's Approach
Commerce Secretary Wilbur Ross pointed to the European Union's interest in working on a trade deal (see 1807250031) that addresses non-tariff barriers and some industrial tariffs as "a real vindication that the president’s trade policy is starting to work." Ross, who was speaking to reporters traveling with the president to Iowa July 26, said Donald Trump's approach is to make it painful for other countries to continue their trade stances.
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"Europe right now has much higher tariffs and much higher trade barriers than we do. Their trade barriers are both in the form of regulations that are not science-based, and standards that also are not science-based. So they have the practical net effect of keeping products out, even if they had no tariff at all. I think if we hadn’t done the steel and aluminum tariffs, and if we hadn’t had the threat of automotive tariffs, we never would have gotten to the point where we are now," Ross said.
Simon Lester, associate director of the Cato Institute's Center for Trade Policy Studies, scoffs at this argument. "This is something that the U.S. and EU were negotiating under the Obama administration," he said. "We could've done all this last year." Moreover, Lester said, the scope of the dialogue outlined at the White House is less comprehensive than the Transatlantic Trade and Investment Partnership. "Certainly there would've been big carve-outs for agriculture, but ag was on the table" in TTIP, he said. Now it's not.
Lester said the administration's goal of "zero barriers" is nonsensical, because the only way to have zero trade barriers would be to join the EU. The negotiations for TTIP tried to address regulations and standards that make it harder to sell goods and services into the EU, he said, but "they didn't really see eye-to-eye on it, and it's not going to change now."
House Ways and Means Committee Chairman Kevin Brady was more laudatory. He called it a "vitally important" agreement, and said, "by moving the EU to work with us to address China's unfair trade and to reform the [World Trade Organization], the President and his team have fundamentally changed the trading environment in a way that will benefit all Americans."
Ross said the EU would not be subject to auto tariffs if they are recommended as long as negotiations are productive, but was evasive about whether Japan, Mexico, Canada or others might be hit with tariffs on autos and auto parts. "In terms of auto tariffs, we’ve been directed by the president to continue the investigation, get our material together, but not actually implement anything pending the outcome of the negotiations. Probably sometime in the month of August we’ll be willing to render a report. It may not be necessary, or it may be necessary. We will see. But the work is continuing. Similarly, the steel and aluminum tariffs stay in place as we sit here."
Ross said he hopes that trade talks with the EU don't last for years. "We’re going to try to do it much faster," he said, giving NAFTA as an example. The NAFTA renegotiations have lasted almost one year.