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January 16, 2019

US eyes duty-free apparel access in EU trade deal

The Office of the US Trade Representative (USTR) has released its negotiating objectives in 24 areas for a potential trade deal with the European Union, including plans to secure duty-free access for US textile and apparel products and improve competitive opportunities for the sector's exports.

By Beth Wright

The Office of the US Trade Representative (USTR) has released negotiating objectives in 24 areas for a potential trade deal with the European Union, including plans to secure duty-free access for US textile and apparel products and improve competitive opportunities for the sector’s exports.

In its Summary of Specific Negotiating Objectives, USTR says the economic relationship between the United States and the EU is the largest and most complex in the world, with more than US$1.1 trillion in annual two-way trade. However, USTR believes US exporters in key sectors have been challenged by multiple tariff and non-tariff barriers for decades, leading to “chronic” US trade imbalances with the EU. The trade deficit in goods with the EU was $151.4bn in 2017.

As indicated in the joint statement issued by President Trump and European Commission President Jean-Claude Juncker following their 25 July 2018 meeting, the United States and the EU would like to pursue negotiations to strengthen their trade relationship to the benefit of all American and European citizens, it adds. 

“Our aim in negotiations with the EU is to address both tariff and non-tariff barriers and to achieve fairer, more balanced trade in a manner consistent with the objectives that Congress has set out.” 

However, USTR notes that while it may pursue negotiations with the EU in stages, it will only do so based on consultations with Congress.

With regard to trade in goods, the US will seek to improve its trade balance and reduce the trade deficit with the EU; increase transparency in import and export licensing procedures; and discipline import and export monopolies to prevent trade distortions.

On industrial goods, objectives include securing duty-free access for US textile and apparel products and seeking to improve competitive opportunities for exports of US textile and apparel products while taking into account US import sensitivities. Other goals include expanded market access for remanufactured goods exports and greater regulatory compatibility to facilitate US exports. 

Meanwhile, on customs and trade facilitation, the US says it will seek to ensure that, to the greatest extent possible, shipments are released immediately after determining compliance with applicable laws and regulations and provide for new disciplines on timing of release, automation, and use of guarantees. Additional objectives in this area include building on and setting high standards for implementation of WTO agreements involving trade facilitation and customs valuation, and increasiung transparency by ensuring that all customs laws, regulations, and procedures are published on the Internet as well as designating points of contact for questions from traders.

Other objectives include ensuring that the EU avoid manipulating exchange rates to prevent effective balance of payments adjustment or to gain an unfair competitive advantage, and providing a mechanism to ensure transparency and appropriate action if the EU negotiates a free trade agreement with a non-market country.

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