German Ambassador, Former US Envoy to EU Talk China, Trade
A former U.S. ambassador to the European Union and the German envoy to the U.S. said a united front on China's trade distortions could make it more painful for that country to continue its current industrial policies. “With the rise of China and the relative decline of Western power it should be in our shared interest to use each other as an asset to leverage our power,” said Emily Haber, Germany's ambassador.
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Former Ambassador Anthony Gardner said the EU is a trade superpower, as well as a regulatory superpower, as the data privacy rules have demonstrated. In these realms, Haber said, “we are equals and therefore the European Union has an impact on decisions the U.S. is making on tax issues on data privacy.”
The two spoke during a webinar hosted Oct. 16 by the Carnegie Endowment for International Peace on the trans-Atlantic relationship. Gardner said that if President Donald Trump -- who has complained that the EU takes advantage of the U.S. on trade -- is reelected, tariffs on European goods might increase. If Democratic Party nominee Joe Biden is elected, Gardner said he expects a return to the way things usually had been between the U.S. and the EU. “If we have a change in regime, there are a lot of things we could do quite quickly together,” he said.
He said the tariffs on European steel and aluminum under a national security pretext encourages other countries to invoke national security rationales for trade actions. While he said there would be no return to Transatlantic Trade and Investment Partnership talks, he thinks the U.S. and the EU should be able to resolve the Boeing-Airbus dispute in the first six months of a Biden administration. That would remove tariffs on $7 billion worth of European imports, primarily planes, foods, and wines and spirits.
“I would like to see the elimination of tariffs on industrial goods,” Gardner said, but he expects that could not happen without some movement in Europe on barriers to imports of U.S. agricultural goods.
Haber did not talk about the possibility of removing tariffs, or making changes to EU sanitary and phytosanitary policies, which Gardner said is needed. “The EU is a very slow partner because it relies on the consensus principle,” she said. Instead, she focused on how the U.S. and EU could align in confronting China. “China is so big a challenge, whether we agree or disagree on taking on this challenge will have an impact on the bilateral relationship between the EU and the U.S.,” she said.
The Office of the U.S. Trade Representative has complained that Germany did not have the same willingness as the U.S. to confront China because of its dependency on China as an export market. But Haber took a tough line during the online talk. “Pollyannaish thinking on China, it’s history, it’s over,” she said. She said the EU and the U.S. agree on market access barriers in China, the need for better intellectual property protection and that forced technology transfer and forced joint ventures have to end.
But if decoupling is going to happen in the tech sector or in medicines, what will its contours be, and what is the ultimate objective, she asked. “Is it to stop the rise of China? I personally don’t think this can be stopped,” she said.