French President Emmanuel Macron called Wednesday (30 May) for talks on overhauling the World Trade Organisation, as European companies braced for the prospect of punishing US tariffs on steel and aluminium imports, which could come as early as Thursday (31 May).
“Now is the time to deal with this matter,” Macron told officials at the annual forum of the Organisation for Economic Cooperation and Development in Paris.
“Threats of a trade war won’t fix anything,” Macron added. “A trade war is always one where everyone loses: Our industries, our farmers, our consumers.”
His comments come after weeks of intense EU lobbying to remain exempted from the metal tariffs announced by President Donald Trump in early March.
But officials have indicated they see little chance that Trump will continue exempting EU companies from the duties of 25% on imported steel and 10% on aluminium.
The exemptions run out on Friday but The Wall Street Journal cited people familiar with the matter saying a last minute deal appeared unlikely, and the tariff announcement could come as early as Thursday (31 May).
“Our task is to find a collective response,” Macron said, adding that “only a reformed WTO can give us this framework.”
He said the reform project should be launched by the US, the EU, China and Japan before a G20 summit meeting in Argentina which begins on November 30.
“We have no choice but to defend with force and vigour a robust multilateralism, the only thing which can reconcile sovereignty and cooperation,” he added.
And in an apparent dig at the US tariffs, he said: “The strong nation is the one following the law, the one that plays by the rules it helped to create, the one that keeps its word.”
Agreeing to disagree
Yet it appeared the rift between Washington and its European allies was deepening, with the US refusing to sign off on the traditional final statement to close the OECD’s annual gathering.
“There is no longer a joint statement,” a French presidential source said, adding that the US delegation vetoed a communique denouncing protectionism and underscoring the risks of climate change.
It would be the second time in a row the US has refused to add its voice to the majority position at the OECD on trade.
Trump’s shock announcement in March of metal tariffs led to a global diplomatic tussle that has unsettled financial markets for weeks.
The threat has prompted European nations to vow to retaliate with duties of its own on American imports, including iconic items such as Harley-Davidson motorbikes and bourbon whiskey.
Separately, the United States is readying trade sanctions against China over intellectual property theft.
“The threat of trade restrictions has begun to adversely affect confidence, and, if such measures were implemented, they would negatively influence investment and jobs,” the OECD warned in a statement Wednesday.
It noted a sharp rise in protectionist moves around the globe since the financial crisis, with more than 1,200 “trade restrictive” measures taken by G20 countries since 2007.
“First and foremost, an escalation in trade tensions should be avoided,” the OECD’s acting chief economist, Alvaro Pereira, said.
French Finance Minister Bruno Le Maire, who attended a panel discussion alongside US Commerce Secretary Wilbur Ross, urged nations to resist the temptations of unilateral action.
“Yes, we must do better and do things more quickly,” he said. “But let’s not abandon multilateralism, because in the end unilateral decisions cannot take the place of multilateral agreements.”
Ross responded with a frank endorsement of one-on-one deals, saying US officials wanted to move quickly.
“We don’t like endless discussions, we prefer bilateral moves for negotiating,” he said, saying that thanks to Trump’s trade policies, “everyone agrees that the WTO needs to be reformed.”