The European Union’s top trade official said Thursday that the bloc would be willing to remove all tariffs on cars and other industrial products as part of a limited trade deal with the United States, an apparent shift that may please the Trump administration but could also violate global trade rules.
The European Union had previously expressed a willingness to eliminate tariffs on cars, but only as part of a broad free-trade agreement.
Limiting the scope of a deal might increase the chances that ongoing talks between Brussels and the White House will be a success. But a less ambitious agreement might also run afoul of World Trade Organization rules, which allow bilateral pacts only if they cover the vast majority of trade between the two partners.
There is little anyone could do to block a deal between Europe and the United States, which form the world’s largest trading partnership. Ignoring the rules would, however, erode the authority of the World Trade Organization, which is already under attack by the Trump administration.
It was not immediately clear whether Malmstrom’s proposal would conform to WTO rules. In her remarks, she also accused the United States of undermining the trade body by blocking the appointment of judges to a panel that arbitrates disputes.
In July, Jean-Claude Juncker, the president of the European Commission, the EU’s executive arm, struck a deal with President Donald Trump which called for talks on a broad deal, while postponing tariffs on cars. Europe and the United States also agreed to work on reform of the WTO.
Some analysts interpreted the agreement between Juncker and Trump as an attempt to reopen talks on a comprehensive free-trade deal, which stalled in the closing days of the Obama administration and died after Trump’s election.
But Malmstrom’s comments Thursday signaled that the European Commission was only willing to pursue a less ambitious pact to avoid further escalation of the trade war with the United States.
This article originally appeared in The New York Times.
Jack Ewing © 2018 The New York Times