European Commission President Ursula von der Leyen is stepping onto very thin ice if she presses ahead with a mini trade deal that she has targeted with the U.S. in the next few weeks.
There are obvious attractions to a quick pact, which the German EU chief says should cover “trade, technology and energy.” Such an agreement could secure a truce in the trade war with U.S. President Donald Trump, which has already hit key EU products such as aircraft, wine and steel. Most importantly for Berlin, an armistice would grant a vital respite to the talismanic German car sector, which Trump is threatening with high duties.
But such an accord will be a hugely risky gamble for von der Leyen so early in her tenure. Leading EU member countries including France do not want her trading away key agricultural concessions, and there is danger of a wider public backlash against Brussels if the EU makes a deal that gives any ground to Washington in the politically explosive territory of food standards and genetically modified food.
Until now, her deal looked impossible — stuck over the issue of agriculture. EU countries, led by France, Austria and the Netherlands, explicitly prohibited the Commission from negotiating with the Americans on agriculture in the negotiating mandate, while Trump insists there will be no deal without farm goods on the table. There was no sign that either side was willing to budge.
And yet, asked about the trade talks last month, von der Leyen said she was aiming to make a deal with Trump within “a few weeks.”
She and her trade chief, Phil Hogan, think they have found a way to square the circle. Legally, they will not include a chapter on agriculture inside a trade agreement — but they will strike separate commitments to lower EU barriers for certain U.S. farm goods.
“We are trying to look at ways where through regulatory cooperation we might be able to look at non-tariff barriers as a way of bringing agriculture issues on the table,” Hogan said.
That doesn’t solve the original dilemma, however. Either the EU opens up its market in a significant way to U.S. farm goods, or it doesn’t. Commission officials, EU diplomats and politicians in Paris, the Hague, Stockholm and Berlin contacted for this article all agreed on one thing: Getting a deal across the finish line in the next few weeks will take some major bluffing. What they did not agree on is who was being tricked: Trump, or European citizens.
Officially, the Commission is only offering extremely minor concessions on farm products. Hogan said the EU would like to talk about food import approvals for products such as “apples and pears” — products which EU farmers want to export to the U.S.
At a meeting of EU trade envoys on Friday, the Commission’s trade chief Sabine Weyand said Brussels was also ready to recognize U.S. testing procedures for “bivalve molluscs” such as oysters and clams, according to three people in the room.
GMOs to sweeten the deal
However, the U.S. has made clear that a deal on clams and pears won’t cut it, and several EU diplomats and Commission officials said they believed the EU would end up offering more.
“We’re not going to get there with apples and pears and shellfish,” U.S. agriculture minister Sonny Perdue told reporters in Brussels last Monday, according to Reuters. “There are other things that have to happen.”
One other thing the EU is mulling is approving more genetically modified crops for sale in the bloc, three people following the file said. That would not require a change in EU laws, as Europe already has a procedure to certify GMOs for consumption. But the Commission has been notoriously slow in approving certain GM crops, especially those that compete with EU products, such as rice and wheat.
“The Commission may offer to approve more GMOs, which would be of real value to U.S. exporters,” one official said.
An EU diplomat said, “The Americans have been waiting for the approval of sensitive GMO crops literally for decades.”
But countries such as France, Austria and Germany are worried about a public backlash, if the deal creates the impression that Europe is “lowering” its food standards or letting in dangerous foods to appease Trump.
Indeed, Perdue also called on Brussels to soften limits on pesticide residues — which are sometimes stricter in the EU than recommended by international organizations.
Fear of a backlash
In the Netherlands, the government is already fighting a backlash from parliament. Trade minister Sigrid Kaag was last week questioned by MPs worried that the Commission was about to sell out EU farmers.
“The EU and the Commission can only work with a mandate that has been given and that’s about conformity recognition, regulation and the industrial aspects. There is nothing else,” Kaag said. “Commissioner Hogan has said that in the future perhaps [there would be talks on agriculture]. Those are his words, the words of Commissioner Hogan.”
“I understand the intention, because it signals goodwill towards the U.S. government that the EU isn’t stubborn. They are taking the cold out of the air, but the mandate is the mandate,” she added.
Paris also warned the Commission that it was playing with fire by allowing the U.S. to put any agricultural issues on the table, as it created an opening for demands on sensitive products like GMOs and chemically rinsed chicken.
The Commission would be “wrong to strike out without consulting with France in particular,” said an Elysée official.
An EU official from another country was even more blunt: “I am sure that the Commission can find legal tricks to put agricultural questions back on the table,” he said, “but there is an academic reality and a political reality. They can do this now but then we won’t trust them the second time around.”
Fooling some of the people some of the time
The problem for von der Leyen is that she won’t get an agreement without some palpable concessions.
One person briefed on her recent meeting with Trump said she was hoping to repeat an agreement similar to the one her predecessor Jean-Claude Juncker struck with Trump in 2018. In that deal, Juncker promised that the EU would buy more U.S. soybeans and natural gas — a bluff, given that he had no power over such decisions.
Washington has now made clear it won’t be fooled that easily again. Asked by POLITICO what sort of deal he envisaged, Perdue replied: “We think we can have a trade deal that’s not necessarily just a quick deal to say: ‘We have a deal.’ We’re looking for real substance there and lowering the trade deficit between the U.S. and EU in agricultural products.”
At the closed-doors meeting on Friday, Weyand told EU countries that it was in their interest to agree to some concessions on agricultural regulations, as the U.S. could lift its tariffs on EU farm goods in exchange. “If well done this could reduce the pressure on agriculture,” one person in the room recalled her saying.
While most EU countries agreed, some warned that the Commission should not explicitly link such agricultural concessions to a wider EU-U.S. deal. “Some countries said this should not be presented as part of a big package,” said one person from inside the room.
Weyand assured them that the Commission would “stick to non-controversial sanitary and phytosanitary standards,” according to the same person. “It was unclear to which ones she meant,” a separate diplomat said.
What the Commission sees as non-controversial may not seem so to the French or German public.
Arthur Neslen contributed reporting – Read more on politico.eu
