Trade Groups Share EU FTA Negotiating Priorities

The U.S. Chamber of Commerce had one of the most comprehensive comments, as it laid out both negotiating priorities and suggestions for early fruits, such as harmonizing customs classifications and increasing imports of non-hormone-treated U.S. beef. The Chamber's major priorities included removing Section 232 tariffs on European metals and not imposing tariffs on European cars and car parts; cooperation in confronting problems in the world trading system; eliminating tariffs on all non-auto industrial goods; regulatory cooperation; and transparency in addressing what it called "non-science based restrictions" on agricultural trade. The Chamber said it also opposes "tariff-rate or snapback quotas, voluntary export restraints" and other ways of managing trade.

The American Automotive Policy Council, which represents Detroit automakers, recommended that tariffs be phased out on both sides on cars and trucks. But, the group said, U.S. reductions to its 2.5 percent and 25 percent tariffs on cars and trucks, respectively, should not happen unless there is more progress on auto regulatory convergence. The Association of Global Automakers, which represents the other auto companies with U.S. factories, is asking that vehicle tariffs on both sides, as well as tariffs on auto parts, be "eliminated at the earliest opportunity." Its comment said that auto trade is 10 percent of all two-way trade between the EU and the U.S., and about 20 percent of car exports go to Europe.

The American Iron and Steel Institute recommended a 30-year phaseout of the truck tariff, in addition to regional value content levels in a steel rule of origin. "Past trade agreements that have relied to a significant degree on tariff-shift rules of origin have allowed imported steel from third countries to be stamped into automotive parts and other steel-intensive goods within the free trade area and thereby be deemed originating," the group wrote.

A group of unions, environmental groups and liberal civic organizations under the banner of Citizens Trade Campaign said that they want a wage standard in the auto rules of origin in an EU-U.S. FTA. The group also said the pact should not extend the length of drug patents, and should tackle climate change.

"A U.S.-E.U. Trade Agreement should require parties to adopt, maintain and implement conventions and policies that fulfill the Paris climate agreement and other climate measures, and must include mechanisms that ensure their swift and certain enforcement. Any pact must explicitly recognize the primacy of domestic and international climate policies over commercial rights, and the deal should tax imported products made under highly climate-polluting conditions," the coalition wrote.

The National Foreign Trade Council, and the Express Association of America addressed customs frictions and de minimis. Express shippers said the de minimis for duties of $170 should be raised, and that when the EU implements its simplified tax collection on imports, those taxes should be collected monthly or twice a year, not on each transaction. "The higher de minimis amount should apply to imports from all origins, and not exclusively goods of U.S.-origin," EAA said.

Etsy, a platform for micro businesses, said it has the most sellers in the U.S., Australia, Canada, France, Germany and Britain. While a third of sales was generated with at least one party outside the U.S., the U.S. is the only one of those six countries where the majority of Etsy sellers do not export. "Currently, customs brokers help larger exporters navigate these complexities, but a business of one exporting a $30 item simply doesn’t have the means to engage those services. We urge negotiators to create a far smaller, simpler set of harmonized tariff codes for low-value goods, and make information about all import/export rules easy to access -- for example, through an open [application programming interface (API)]," Etsy wrote.

Trade groups representing metal consumers -- such as motor vehicle parts manufacturers and the aluminum industry -- asked that Section 232 tariffs be lifted without quotas. But so, too, did the group that represents distillers. American whiskey has faced 25 percent retaliatory tariffs. The Distilled Spirits Council said that the tariff has cost sales at companies large and small. It said one large distiller said it expects to lose more than $25 million in sales next year, and the losses have canceled out the benefits from corporate tax rate rollbacks. Aside from the end of 232s, the Council asked for the end of tariffs on rum and changes to excise taxes, because some countries favor domestic producers in setting those excise tax levels.

The Duty Drawback Coalition argued that drawback should still be allowed in trade deals. "They are not two distinct and contrary concepts in such conflict with each other that we must choose either one or the other, but not both. The negotiating position of the United States in NAFTA, and we believe the USMCA, was that the elimination of duty drawback was necessary to create a disincentive for Asian and European countries to establish export platforms in Mexico or Canada to the detriment of U.S. manufacturers and suppliers. That issue has never been raised with respect to the EU, nor should it be relevant to any U.S.-EU trade negotiations," the coalition said.

The National Council of Textile Organizations told USTR it rejects Europe's two-step determinant of apparel rule of origin, and instead, wants yarn forward in any deal. It said there's "pervasive customs fraud in textiles," so it recommends an enforcement chapter similar to the one in the new NAFTA, which includes unannounced factory visits.