MEPs urge exceptional measures to compensate US tariffs on EU foodstuffs

A customer shops for French wine in a shop in Los Angeles, California. [EPA-EFE/LAURENT]

More than 50 EU Parliament lawmakers have co-signed a letter calling on the European Commission to take exceptional measures in support of agri-food sectors targeted by punitive US import tariffs.

The letter addressed to EU Agriculture Commissioner Janusz Wojciechowski is an initiative of French centrist MEP Irène Tolleret and socialist lawmaker Juan Ignacio Zoido, who co-chair a parliamentary intergroup on wine, spirits and foodstuffs.

In the letter, they urge the EU executive to activate as soon as possible the exceptional measures – including a compensation fund – foreseen in the Common Market Organisation (CMO) regulation, known as Europe’s “safety net” for agriculture markets in times of crisis.

Signatories refer to Article 221 of the CMO regulation which covers “necessary and justifiable emergency measures to resolve specific problems” on EU agriculture markets, and can remain in place no longer than one year.

In October, the US administration decided to impose 10-25% tariffs on European goods after the World Trade Organisation (WTO) had ruled in favour of the US in a transatlantic dispute over subsidies to Airbus, the European aircraft manufacturer.

The tariffs apply to imports of EU products worth €6.8 billion, ranging from Italian cheese to French wine and Spanish olive oil while. The decision triggered strong reactions across Europe, threatening to escalate already tense trade relations between the EU and the US.

In their letter, EU lawmakers draw attention to a new US tariff of 25% “ad valorem” imposed on iconic EU products, arguing it could cause severe harm to a large number of producers, particularly small and medium-sized companies.

The new tariff has the potential to cause some EU businesses to leave the US market, while those most heavily dependent on US sales face high risks of bankruptcy, warn the signatories of the letter.

The new increased US tariffs might be applied as of 18 March. However, last week EU Trade Commissioner Phil Hogan said there was a “window of opportunity” to reach an agreement with the US before the new tariffs start kicking in.

Hogan was expected to visit the US and Canada next week in an attempt to ease trade tensions between the two sides, but the trip was cancelled due to concerns about the spread of the novel coronavirus, two EU official told Reuters.

Von der Leyen sees 'momentum' for improving EU-US relations

European Commission President Ursula von der Leyen said on Thursday (5 March) “there might be momentum” for improving the EU’s relationship with the US, but it remained unclear when she will present a trade offer to US President Donald Trump to avoid further tariffs.

 

EU lawmakers consider it “unacceptable” that farmers and food manufacturers in Europe are paying the price of a transatlantic dispute, which originated in a completely unrelated sector, aviation.

The EU “should no stand idly by,” they argue.

In the letter, they urge the Commission to integrate a principle of non-retaliation for the agri-food sector, saying a solution to the EU-US trade dispute should be found without involving the food supply chain.

Settling the dispute with the US is now a matter of urgency for EU food exporters, the lawmakers write, warning about a severe drop in demand caused by a combination of the new US tariffs and the coronavirus crisis.

Agri-food exports to US spike ahead of tariffs storm

The last monthly update on agri-food trade with data until October 2019 confirmed a favourable trend of EU food exports to the US ahead of punitive tariffs promised by the Trump administration.

[Edited by Frédéric Simon]

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