Washington Insider -- Tuesday

US, EU Trade Talks, Again

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

China Confirms Starting Review Of Antidumping Duties On US DDGs

China's Ministry of Commerce confirmed Monday that it is reviewing antidumping duties currently in place on imports of U.S. distillers' dried grains (DDGs), with the review likely to be completed in year.

The review will determine "whether it is necessary to continue to impose anti-dumping and anti-subsidy measures on imported DDGS from the United States," the agency said on its website.

Interested parties can submit information and evidence on the review within 20 days, the agency said.

Reuters reported last week that the US Grains Council had submitted a request to the Chinese ministry to review the duties placed on imports of U.S. DDGs.

Sen. Sanders Calls For Trump To Scrap USMCA

Democratic presidential candidate Sen. Bernie Sanders. I-Vt., called on President Donald Trump to abandon his push for the U.S.-Mexico-Canada Agreement (USMCA).

“The NAFTA treaty that Trump renegotiated with Mexico will still allow companies like General Motors to send our jobs to Mexico,” Sanders said during a rally in Warren, Michigan. “So today, I challenge Donald Trump: For once in your life, keep your campaign promises,” he stated.

Sanders called on Trump and his trade team to "go back to the drawing board on NAFTA. Do not send this treaty to Congress unless it includes strong and swift enforcement mechanisms to raise the wages of workers and to prevent corporations from outsourcing American jobs to Mexico.”

Washington Insider: US, EU Trade Talks, Again

Bloomberg is reporting this week that the EU gave the green light to start trade negotiations with the U.S. as both economies seek to rebuild frayed relations a week after threatening each other with billions of dollars in new tariffs over a 14-year-old aviation dispute.

EU ministers on Monday authorized talks to eliminate tariffs on industrial goods, following through on a political accord reached in July between President Donald Trump and European Commission President Jean-Claude Juncker. EU trade chief Cecilia Malmstrom said she’s determined to seal an agreement by the beginning of September.

Negotiations will start amid escalating transatlantic tensions, with the U.S. accusing the EU of not acting in good faith and delaying the start of talks. The EU sought the deal with the U.S. president, in part to avoid levies the administration threatened on foreign automobiles and car parts.

“We are ready to move onto the next phase of EU-U.S. relations,” Malmstrom told reporters in Brussels on Monday, adding that she would reach out to her U.S. counterpart immediately to set a date for talks. “I am convinced that breaking down barriers to trade between us can be win-win.”

The U.S. president’s car-tariff warning, which was based on the same national-security grounds used for controversial duties last year on foreign steel and aluminum, will weigh heavily on discussions, with the EU bristling over the idea that it poses a threat to the U.S.

“We aren’t enemies of the economy here, we aren’t threatening the economy here, we are the closest friends,” European Commissioner of Economic Affairs Pierre Moscovici told Bloomberg last week in Washington. “Let’s cool down, let’s not talk about any trade war between us, but in case, we need to be prepared.”

In a separate trade matter, the EU is considering hitting US goods ranging from handbags to helicopters with retaliatory tariffs to the tune of 10.2 billion euros in a dispute over subsidies to Boeing Co. The plan follows a U.S. threat to seek $11 billion in damages through duties on European goods to counter state aid to Airbus SE.

The removal of transatlantic tariffs on industrial goods would expand U.S. exports to the EU by 13% and the bloc’s shipments to the American market by 10%, the commission said in January. The average tariff on non-farm products is 4.2% in the EU and 3.1% in the U.S., according to Brussels.

In its negotiating mandate, the EU made clear that agriculture would not be included in the discussions, with Malmstrom saying this was “a red line for Europe.” This could presage a fight with the U.S., which has insisted that farm goods be a part of the talks.

USTR’s chief agriculture negotiator Gregg Doud was highly critical of the EU over its farm policies. For its part, the EU also underscored that it wouldn’t agree to any deal as long as the current metals tariffs are in place and that it would be able to “suspend negotiations unilaterally if the U.S. were to impose further trade restrictions against European products.”

“The talks are a great opportunity, because we will be sitting down at the table for technical discussions with a country that has lately been more interested in confrontation than in free trade,” Holger Bingmann, president of Germany’s BGA exporters’ association, said Monday.

Some U.S. ag groups have been critical of the administration’s trade policies, especially those that seem likely to threaten long-established markets. In addition, it likely will turn out to be quite difficult to undertake significant negotiations with the EU if agriculture is excluded and if the administration continues to rely on metals tariffs. This is an important debate and one producers should watch closely as it intensifies, Washington Insider believes.

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