The EU has, for the time being, agreed on the European contribution to the implementation of the EU-US trade agreement. What next?
During the night of Tuesday into Wednesday, EU negotiators agreed on legal proposals aimed at implementing the EU-US trade deal. The agreement is seen as an important step in implementing the European Union’s ‘Turnberry Agreement’.
WHAT IS THE TURNBERRY AGREEMENT?
Last summer, European Commission President Ursula von der Leyen and Donald Trump reached an agreement in Turnberry, Scotland, at Trump’s golf course.
Essentially, the agreement foresees the US imposing tariffs of up to 15% on most EU products. In return, the EU will completely eliminate tariffs on US industrial products and facilitate access to the European market for some US fisheries and agricultural products.
WHAT HAS HAPPENED SINCE THEN?
For the EU to fulfil its part of the deal, it must adopt new legislation. Early on Wednesday morning, the relevant European institutions provisionally agreed on a legal act. Parliament negotiated the inclusion of several conditions in the future European law.
WHAT CONDITIONS DID THE EUROPEAN PARLIAMENT INCLUDE?
In particular, the agreement is accompanied by a “sunset clause.” According to this clause, the agreement will only apply until the end of 2029, but can be extended.
A safeguard clause aims to allow the agreement to be suspended if increased tariffs continue to apply to aluminum and steel products after December 31, 2026.
A safeguard mechanism also aims to prevent ‘serious injury’ caused by increased imports of US products. To this end, the European Commission must publish a quarterly report on trends in trade volumes between the EU and the US.
WHAT IS THE NEXT STEP?
The agreement still requires final approval by the European Parliament and the Council of the EU – the body representing the 27 member states. The European Parliament has scheduled a vote for mid-June.
European Commission President Ursula von der Leyen, who had negotiated the initial agreement, welcomed the outcome: “This means that we will soon deliver on our part of the EU-US Joint Declaration, as promised,” she wrote in X. The two lawmakers are expected to conclude the procedure quickly.
Together, they can ensure “stable, predictable, balanced and mutually beneficial transatlantic trade.”
However, it remains to be seen how the US views these new terms. Within the EU, there is confidence that the US government will accept them. A European Commission spokesman said on Wednesday that discussions were proceeding at a rapid pace. The US government is waiting for this agreement, and the EU assumes that it will be seen as “good news” there too.
WHY HAS IT TAKED SO LONG?
Within the EU, it has been stressed that this is a normal legislative process. However, the legislative process was suspended twice – due to Donald Trump’s threats about Greenland and the US Supreme Court ruling, which invalidated the legal basis for the US tariffs on which the agreement was based.
After Donald Trump threatened in early May to increase tariffs on vehicles and set a July 4 deadline for the EU to implement the agreement, pressure on the EU increased.
WHAT ARE THE HOPES ASSOCIATED WITH THIS AGREEMENT?
The Turnberry deal between Donald Trump and Ursula von der Leyen has been criticized, particularly by MEPs, as unfair. “I wouldn’t call this a good deal – not yet,” Bernd Lange, chairman of the European Parliament’s Trade Committee, said on Wednesday.
During his press conference on Wednesday, the Social Democrat also referred to the situation Ursula von der Leyen was in at the time the deal was reached. According to Lange, Donald Trump had thus linked his demands for tariffs to the issue of increasing American support for Ukraine.
The European Commission regularly stresses the importance of this agreement, which aims to provide “stability and predictability” for European businesses and consumers. The implementation of the agreement is expected to bring hope that repeated threats of tariffs will soon be a thing of the past. (DW)