New EU-US trade deal announced, but EU blocks UK trade deal again
Yesterday two statements were issued by the EU about its trade talks. One was in French, from Monsieur Barnier, about the lack of progress on reaching a deal with the UK.
The other was in English, hyping a supposed new Tariff Agreement with the United States.
Let’s start with the new EU-US deal
Yesterday in Brussels the EU Trade Commissioner Phil Hogan announced “agreement on a package of tariff reductions that will increase market access for hundreds of millions of dollars in U.S. and EU exports.
So what does this exciting EU-US deal cover?
Well, the answer is “Not much.”
The deal covers EU exports of “certain prepared meals, certain crystal glassware, surface preparations, propellant powders, cigarette lighters and lighter parts”
The total value of these EU exports: $160 million per year
The total value of all EU exports to the US: $684,000 million per year
This new deal covers only 0.023% of all EU exports to the US
And tariffs have not been eliminated by the US, only halved
- Source: Office of the United States Trade Representative, data for 2018
To get this deal, the EU had to agree to eliminate completely all tariffs on a range of products which the US exports to the EU.
How does yesterday’s EU-US trade deal compare
to the potential EU-UK trade deal?
Value of EU goods exports covered by new EU-US trade deal: €136m
Value of EU goods exports covered by potential EU-UK trade deal: €318,099m
The UK deal would be worth over 2,300 times more than the US deal which the EU did yesterday
What was the result of the latest EU-UK trade talks this week?
Yesterday in Brussels Michel Barnier issued a statement regarding the end of Round Seven of the EU-UK trade talks with David Frost and his team.
The majority of the statement was in French and the EU has not translated this, as usual. At over 2,000 words Monsieur Barnier has still not learnt the art of précis. David Frost’s statement was a fraction of the length of Michel Barnier’s, as usual, coming in at under 300 words.
It is therefore perhaps more helpful for readers if I provide two quotes from David Frost’s statement, which sum up the situation between the two sides.
We have had useful discussions this week but there has been little progress.”
“We are seeking a relationship which ensures we regain sovereign control of ourown laws, borders, and waters, and centred upon a trading relationshipbasedon an FTA like those the EU has concluded with a range of other international partners, together with practical arrangements for cooperation in areas such as aviation, scientific programmes, and law enforcement. When the EU accepts this reality in all areas of the negotiation, it will be much easier to make progress.”
David Frost's statement following the conclusion of round 7 negotiations with the EU
"We have just concluded the seventh round of negotiations with the EU. As I said last week, agreement is still…
Once again the EU Commission is trumpeting its prowess at doing trade deals. In this case, the deal with the United States is so tiny it will not even register on the majority of EU27 countries’ own export figures, let alone the EU’s collective figures.
In the meantime, the EU has an opportunity to do a quick trade deal with a large country on its doorstep, its second-largest export market, and a country with whom it has a massive trade surplus.
Right now the EU will not even offer the UK a trade deal such as those it has done with Canada and Japan since the EU Referendum.
I have consistently argued since 2015 that the federalist fanatics of the EU Commission would never offer the UK a sensible and logical deal. These people are missionary zealots. They are driven by ideology, not by the economic best interests of their member states.
I believe the Government should not only ramp up its arrangements for trading on WTO terms with the EU from the end of this year, but it must be seen to be doing so. The apparatchiks of the EU read the FT and the Guardian, and they watch the BBC. As a consequence, it is my opinion that they continue to believe the Remainers’ talk of a last-minute compromise, whereby the UK will cede on its various red lines and the EU will continue to have control over aspects of the UK’s business and society.
If the Government does compromise, they would not be forgiven by many millions of voters. The EU must now cut out the nonsense and do a deal, I don’t think they will and they will then be responsible for job cuts across the EU. So be it.
[ Sources: EU Commission | EU Trade Directorate | Office of the United States Trade Representative | №10 Press Office ]