The EU agreed on 15 April to launch trade talks with the US, but said it would suspend them should President Donald Trump impose new tariffs or refuse to withdraw existing steel and aluminum duties as part of the negotiations.
Negotiating directives approved by EU ministers seek to eliminate duties for industrial goods and establish joint standards for the testing, inspection and certification of new products. Fisheries are included in the negotiations, but agriculture is not.
The talks, part of a transatlantic trade truce reached in July last year, are driven by hopes that the negotiations can convince Trump to not slap high tariffs on imports of European cars and car parts.
"With today’s adoption of the negotiating directives for trade talks, the EU is delivering on what Donald Trump and I have agreed" last year, European Commission President Jean-Claude Juncker wrote on Twitter, adding that "slashing tariffs on industrial products could lead to additional increase in EU and US exports worth €26 bn."
EU trade chief Cecilia Malmström said the negotiations could allow the two sides “to avoid a potentially damaging trade war and end a self-defeating cycle of measures and countermeasures.”
The EU directives explicitly stress that Brussels will cancel talks if the US adopts "new measures against the European Union under Section 232 of the Trade Expansion Act of 1962" — the law under which Trump has threatened to impose his auto tariffs.
Moreover, the Commission "may" suspend talks if the United States imposes tariffs under Section 301 of the 1974 Trade Act "or under any other similar United States law," the directives said. The US has used the Section 301 law to threaten tariffs against the EU because of its ban on hormone beef imports as well as its contested subsidies for airplane manufacturer Airbus.
The US must also remove its tariffs on steel and aluminum imports from Europe "prior to the conclusion of negotiations," the directives said.
Many in Brussels expect difficult negotiations ahead because the US negotiating objectives, released in January, push for a more comprehensive trade agreement that also includes agriculture.
"The EU governments ignore all criticism of the mandates ... without being even half sure that serious negotiations can take place at all," said Green MEP Reinhard Bütikofer. "The starting positions are very far apart."
German Economy Minister Peter Altmaier admitted that talks "will not be easy," but said he is nonetheless optimistic.
Malmström also struck an upbeat tone on Monday. “Now the ball is in the court of the US to see when can we start," she told reporters in Brussels. "If we agree to start, I think we can go quite quickly.”
She added that “from our side, we are definitely determined to do everything we can to finish this under the Juncker Commission,” which is in office until the end of October.
The EU directives say the main goal of talks is to "eliminate all duties for industrial goods on a reciprocal basis" while taking account "of the particular sensitivities for certain goods, including energy-intensive products, and of the environmental impact arising from the differences in the EU and US regulatory frameworks."
The document also says that the trade agreement "should be fully consistent with World Trade Organization (WTO) rules and obligations," and tasks the European Commission with conducting a sustainability assessment "as soon as possible" to measure "the potential economic, environmental and social impacts of the provisions of this agreement."
A separate Council decision on the launch of talks also notes that the controversial and uncompleted Transatlantic Trade and Investment Partnership (TTIP), which the EU and US negotiated from 2013 to 2016, "must be considered obsolete and no longer relevant."
France was the only EU member country to vote against the launch of trade talks with the United States because of Trump's announcement that he would withdraw his country from the Paris Climate Agreement. Belgium abstained from the decision.