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TRADE RELATIONS
The EU and its trading relationships with the US, Canada and Mercosur The European Union is continually in dialogue with trading nations tackling barriers to trade. One way of eliminating trade barriers is to enter into a free trade agreement. Besides promoting trade and eliminating obstacles to trade, trade agreements with other countries are also used to further the European Union’s green and sustainability ambitions.
Tekst Mr Jefke Daems, Tax Lawyer specialising in Customs Law, Andringa Caljé Advocaten
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hese days a trade agreement can no longer be disassociated from the sustainability targets to which the European Union has committed itself. This trend can be seen in recently concluded trade agreements, such as that with Canada. In this piece I shall briefly outline the state of play with regard to the EU’s trading relationships with the United States, Canada and the Mercosur countries.
EU – United States The European Union and the United States are important trading partners for each other. The importance both parties share for the removal of trade barriers was not always evident during President Trump’s term. Former President Trump’s approach of America First with, at its nadir, the United States’ withdrawal from the Paris Agreement, made it difficult to reach any compromise with the United States. Partially due to this, the Transatlantic Trade and Invest-
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ment Partnership (TTIP) negotiations were abruptly terminated. As a consequence of the absence of a trade agreement “third country” import duties still apply. In the meantime, the efforts of EU Commission President Von der Leyen and President Biden are bringing the parties closer together. This reconciliation is reflected in the new trans-Atlantic agenda and more concretely in three recent developments: During the EU-US summit in Brussels on 15 June 2021 agreements were reached on a cooperative framework for large civil aircraft that resulted in obstructive trade measures effected by both sides having been deferred for five years. The dispute between the European Union and the United States with respect to Airbus/Boeing before the WTO’s Dispute Settlement Body has not yet been resolved but the negative effects of this conflict have been limited as far as this is possible. Furthermore, during this EU-US summit in Brussels, a trade and technology council (TTC) was established consisting of 10 working groups with
the aim of broadening and strengthening the trading relationship between the EU and the US. Think here, for instance, of cooperation in areas such as technology for sustainable developments and export controls. With effect from 1 January 2022 the import levy imposed by the United States on steel and aluminium will be scrapped. As a consequence, there is scope to be able to tackle the worldwide problem of overcapacity in the sector.
EU – Canada The trading relationship between the EU and Canada was shaped with the partial entry into force of the Comprehensive Economic and Trade Agreement (CETA) on 21 September 2017. Since then companies and consumers have been able, amongst other things, to take advantage of the abolition or lowering of customs tariffs and improved access to the market for service providers and investors. Preferential tariff treatment may be claimed if products are of Canadian or European origin. The fact that the CETA Treaty has not yet come into full effect is due, in particular, to concerns about the compatibility of the dispute settlement mechanism with EU Primary Law. The Court of Justice decided on 30 April 2019 that the dispute settlement mechanism does not contravene EU Primary Law.
