The European Union and the United States announced on Sunday their intention to suspend the dispute over tariffs on aluminum and steel exports within the framework of the World Trade Organization, on the sidelines of the G20 meeting in Rome, as they try to negotiate a global agreement that addresses the problems derived from overproduction in the international market.
“This marks a new milestone in the renewed relationship between the EU and the US . And it is a world first in our efforts to achieve the decarbonisation of global steel production and trade,” said the President of the European Commission, Ursula von der Leyen, at a joint press conference with US President Joe Biden.
The agreement is actually the result of the US decision to eliminate tariffs on exports, up to pre-dispute volumes, keeping them at 25% for steel and 10% for aluminum . In response, the EU will also suspend the rebalancing measures it put in place to counter their impact.
This is not an agreement, which could have WTO consequences, but rather a response to an offer from Washington. “When one of your business partners lifts an illegal measure , you simply cannot object,” European sources assured.
The dispute dates back to 2018, when the US administration of Donald Trump introduced tariffs worth 6.4 billion euros , sparking a trade war between transatlantic partners. The EU had suspended part of its rebalancing measures to give the parties time to negotiate an agreement that arrived this week.
A cleaner industry
The agreement between the US and the EU also establishes that both partners will work to make the agreement and aluminum industry more sustainable, with a significant carbon footprint . Both partners consider that the problems of excess capacity are also responsible for the generation of unnecessary emissions.
The negotiation could also be framed in the context of the mechanism in which the Union works to impose tariffs on those products imported into the EU from countries with climate standards below those of Europe.
The truce marks the third trade agreement between Washington and Brussels since the arrival of Joe Biden to the White House, after ending a 16-year conflict over state aid to Airbus and Boeing, and the launch of a transatlantic council of commercial and technological cooperation.