Hello from Brussels, where the barbed wire barrier has been removed, and the buses are running on the usual route instead of diverting around the city center. In general, the city has a typical after-morning feeling, like Visiting from the United States is the same as the president.Today’s main article focuses on the true meaning of Joe Biden’s Brussels trip for trade, and Concession watersIn-depth discussion of the nature of the trade relationship between the two jurisdictions.

Now it is warm words, but waiting for the cold reality

Therefore, the U.S. presidential march certainly left a deep sense of relief in the Brussels trade world, and they are dealing with the personable and constructive Joe Biden and Catherine Tay, rather than with the rude and often poisonous Donald Trump Deal with Robert Lighthizer.

The biggest victory is Airbus-Boeing deal After just 17 years of WTO litigation, not only because of itself, but because it talked about the possibility of constructive participation.US Trade Representative Mr. Dai said at a media roundtable in Brussels on Tuesday: “This is a test of our relationship and our ability to build confidence and trust.” However, as a trade secret. Written yesterday, Between the two economies and their aircraft manufacturers, a temporary “walk-and-go” method does not necessarily work. These two economies still have serious problem The subsidy model with each other.

In fact, if you want to summarize the entire experience, it is that while leaders and officials enjoy the rhetoric of cooperation and mutual learning, they still need to experience a cold shower of political and legal reality. On the way to the locker room.

Regarding China as a common competitor is undoubtedly a useful connection experience and framework tool. The Airbus-Boeing deal was described as a joint response to the rise of aircraft manufacturers in non-market economies. Similarly, the United States promised to repair the “Section 232” national security tariffs imposed on EU steel and aluminum that the Biden administration inherited from Trump. This is done in the context of China’s (and other countries’) steel production driving global overcapacity.

Nevertheless, it is necessary to anger allies like the EU (and possibly Violation of international law) And disappointed politically strong domestic constituencies such as the steel industry because they like tariffs. The Biden administration has so far Choose the former.

Plans to eliminate existing transatlantic stimuli remain fragile or ambitious. Airbus-Boeing subsidies have been suspended but not cancelled. Dai said on Tuesday: “We have turned to cooperation and collaboration, but it would be helpful to have the ability to restore these tariffs to maintain mutual honesty.” In other words: trust but verify, agree to a ceasefire but not disarm.

Regarding Article 232, which was supposed to be repaired in early December, Dai said: “We must face some thorny issues, and we must resolve some deep feelings… We will push ourselves and our partners in the EU to gain benefits. Because of our relationship, our industry, our economy, and our workers.” If you believe in the zero-sum logic of protectionism, it may be difficult to achieve all these goals at once.

There are mysterious “wait and see” voices on both sides. They may punch enough holes in the 232 tariff barrier to allow some European steel and aluminum to enter the United States without alienating blue-collar workers, enough for the Midwest to fight the Republican Party. people. But completing this work in less than six months will be technically and politically difficult.

As for the WTO itself, the Biden administration took swift action in the first few weeks to lift the obstacles to the appointment of Ngozi Okonjo-Iweala as Director General, which certainly pleases the EU and others. . But this is not politically expensive: only isolationists in American politics and business really want to destroy this institution. On Tuesday, when asked about the prospects of reviving the WTO’s currently paralyzed Appellate Body, Dai said: “I will definitely not answer this question. The US steel industry has long disliked the US steel industry’s ruling that the US anti-dumping duties are illegal. .”

Kindness sounds like it must be there. Every sentence of the two parties is full of co-operative rhetoric. Ms. Dai even spared no effort to praise the EU’s submission to the WTO on the issue of vaccine intellectual property rights. Unlike the US position, the issue does not require the abandonment of patents.

On this issue, by the way, although she refused to rule out the possibility of the United States submitting the negotiating text itself, she said: “I think we have unique capabilities in this issue in the WTO and can act as a mediator on this issue. , To build credibility in different aspects.” This reinforces our view that the United States is more willing to support exemptions to obtain good public relations in principle, rather than express a position in negotiations.

Regardless of the atmosphere, the Biden administration is overwhelmingly focused on the domestic economy and maintaining political support, while the European Union has no votes in the US midterm elections next year. We will observe the results with great interest, but we are not confident that everything will be resolved in a short period of time.

Concession waters

We have written articles on diplomatic relations, but what about trade between the EU and the US? As shown in the figure below, there is a close and increasingly important relationship between the two. The EU’s surplus has increased slightly recently, but the increase is smaller than the increase in the total value of traded goods.

In terms of industries, the following are the most valuable industry segments in the EU. The importance of machinery and transportation equipment partly explains why Trump’s threat of tariffs on the auto industry has so irritated lawmakers here. Claire Jones

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