The United States and the European Union are working to coordinate efforts to address non-market economy policies and practices with an understanding that the trans-Atlantic partners bring different tools to the table -- and share a goal of minimizing harmful side effects on each other’s economies, according to Assistant U.S. Trade Representative Dan Mullaney.
An agreement to consult on domestic actions aimed at non-market economies was among a host of outcomes detailed in a joint statement following the second set of meetings of the U.S.-EU Trade and Technology Council last week in France. Although concern about Russia’s war in Ukraine was front and center during the meetings -- and is repeatedly cited in the statement -- challenges posed by non-market economies remain “very much at the forefront of our thinking,” Mullaney said on Wednesday. He spoke about outcomes from the TTC’s working group on global trade challenges -- one of the council’s 10 working groups -- during a webinar hosted by the German Marshall Fund.
Mullaney said the two sides would “coordinate and consult” on their domestic measures in place and under development “to push back against non-market economy policies and practices.” He did not specify which non-market economies could be the focus of such measures.
Asked whether those efforts could include a joint initiative to impose tariffs on Chinese goods -- potentially via Section 301 of the Trade Act of 1974 in the U.S. and some “comparable” tool by the EU -- Mullaney said it was “unclear that the European side has tools that are like ours in that respect and like those that the questioner mentioned.”
Instead, the U.S. and EU will focus on implementing their respective tools “with a view to increasing their effectiveness” and -- “equally importantly” -- by trying to ensure they do not “create collateral damage for each of us,” he said.
The EU has tools similar to U.S. antidumping and countervailing duty laws and is developing others, including anti-coercion and foreign subsidies instruments, Mullaney noted.
During a briefing ahead of the meetings in France, an EU official told reporters that the council’s work on non-market economies intentionally does not single out China, saying the TTC is “not a China dialogue.” The joint statement -- which had been finalized but not yet released at the time of the briefing -- mentions China only passingly, the official noted.
Although “it’s clear that there is a bipartisan agenda in the U.S. against China,” the official added, “I don’t think we have the same approach in the EU.” The official contended that the bloc is more focused on risks “wherever they come from.”
Mullaney said the two sides also agreed to develop “joint or coordinated strategies” to counter the effects of non-market policies in “particular sectors, with respect to particular practices.” The U.S. and EU are working to identify sectors where they face common challenges and have “noted that medical devices seemed to be a good issue to be discussing,” he said, adding that officials were “hopeful” about identifying others.
A different EU official told reporters last week that industry representatives had flagged medical devices as “a real sector of danger.”
The council’s working group on global trade challenges also is focused on efforts to “avoid unnecessary barriers as they threaten to arise due to emerging technologies,” Mullaney said.
As part of that effort, he said the U.S. and the EU “agreed that we would sit down and consult as new regulatory and other initiatives come forward.” On emerging technologies in particular, he added, the two sides will seek to “maximize common approaches” while “recognizing we're maybe going to have different political objectives in each of our regulatory approaches.”
“[W]e don't mean to interfere, of course, with those regulatory objectives, but we recognize that there are also barriers that can arise that interfere with having a robust trans-Atlantic marketplace and that don't need to be there to serve that regulatory agenda,” he said.
The U.S. and the EU also agreed to take a cooperative approach to reducing shared trade barriers in third countries and to try to facilitate bilateral trade by avoiding things like duplicative or inconsistent product testing, among other efforts, Mullaney said.
Specific trade facilitating initiatives listed in the joint statement include exploring the use of digital tools for trade facilitation and identifying “specific areas or products, including those identified by industry stakeholders, where strengthened cooperation on conformity assessment could facilitate transatlantic trade” by the next TTC meeting, set for early winter.
A draft joint statement leaked in April listed other specific potential initiatives, including “Improvement of the implementation of the Sectoral Annex on pharmaceutical good manufacturing practices to the EU-U.S. Mutual Recognition Agreement (GMP MRA) and support for the expansion of its Sectoral Annex to veterinary medicines” and “Expansion of the Marine Equipment Mutual Recognition Agreement (MRA) to certain radio equipment,” but that language does not appear in the final statement.
Mullaney said officials decided they needed to have “a more detailed conversation” to determine “where the value added would be greatest in terms of streamlining testing” before identifying specific sectors to target for better cooperation on conformity assessment.
Labor and environment issues also are priorities for the TTC global trade challenges working group, Mullaney said, noting that they are related in that both the U.S. and the EU want a transition to “sustainable, resilient green digital economies” to support workers.
Among the group’s labor-focused outcomes is a new trans-Atlantic Trade and Labor Dialogue that will engage with unions and businesses about worker-rights issues.
The working group also laid out areas for cooperative efforts on climate issues, including via international fora; exchanging information about environmental provisions in U.S. and EU trade agreements; and sharing information on rules and actions relating to illegal, unreported and unregulated fishing, among other efforts described in the joint statement.
A separate working group dedicated to addressing “climate and clean tech” is focused on cooperation on carbon-accounting methodologies, green public procurement and electric vehicle charging infrastructure and interoperability, according to the statement.
“Trade policy is not climate policy, it’s not environment policy, but trade policy can support the policies that are made to address climate change,” Mullaney said.
He said both the U.S. and EU have “very significant” policies relating to the environment and climate change and would be discussing “all the various ways” trade can support those policies.
“As to what specifically we might agree on to support our climate policies, I think that that will be subject to further discussion between the U.S. and the EU,” he added.
Mullaney declined to comment about language on a so-called “climate peace clause” that appeared in the April draft statement, saying he hadn’t looked at reported leaks. The language, which does not appear in the final statement, would have committed the U.S. and the EU to “refrain from trade defence measures targeting either side’s green and energy transition support schemes.” -- Margaret Spiegelman (firstname.lastname@example.org)