MNI EXCLUSIVE: Ex-USTR Officials See Potential Mini EU Deal

--Negotiators May Agree On Food Safety Rules, Avoid Bigger Tariff Talks

By Evan Ryser

     WASHINGTON (MNI) - Former United States Trade Representative officials told

MNI they see momentum for a mini trade deal between the U.S. and the EU,

avoiding a fight over agriculture and digital rules that worsened a clash with

China.

     Small rule changes that free up two-way food trade could be done in the

next few months along with some focus on digital commerce, said Darci Vetter,

former chief agricultural negotiator for USTR.

     There have also been discussions on a limited set of technical issues

around animal and plant health standards, while a comprehensive deal that lowers

agricultural tariffs is not "anywhere on the table," she said in an interview.

     "You've seen the EU be very clear that agriculture sort of writ large was

not in their mandate for an overall trade deal with the U.S. -- I don't think

that has really changed," said Vetter, now general manager for public affairs at

Edelman.

     European officials appear to be aiming their pitch towards the kind of

quick trade deal President Donald Trump has often touted, according to Bruce

Hirsh, former assistant USTR. "The Europeans have been reading the tea leaves

and have been seeing what the Trump administration has been interested in

lately. They have been small scale and have checked certain boxes, including

agriculture."

     --U.S. INTERESTED

     "It is a possible sign that the U.S. is at least interested in exploring

the idea that the EU has put on the table," he said. 

     Trump's threats of tariffs against China, the EU, Mexico and Canada slowed

global investment and manufacturing last year, pressing the Fed and other

central banks into the biggest wave of rate cuts since the 2008 financial

crisis. In this election year Trump has moved to sign a Phase One deal with

China, ratify USMCA and has avoided repeated Twitter threats of EU tariffs.

     Whether small EU rule changes placate farmers and their supporters on

Capitol Hill remains to be seen, said Hirsh, also former chief international

trade counsel to the Senate Committee on Finance.

     European Commission President Ursula von der Leyen said in Davos she wanted

an agreement together "in a few weeks' time."

     Von der Leyen is expected to visit Washington as soon as next month.

     --PERDUE SEEKS RECIPROCITY

     U.S. Secretary of Agriculture Sonny Perdue on Wednesday told reporters

"there is a pretty significant list" of changes to food health standards "which

we think they could get pretty close to equalizing our trade balance between the

two entities if they do that." He cited a USD10 billion to USD12 billion trade

deficit with the EU in agriculture.

     Perdue said European complaints about U.S. sanitary practices, especially

those involving fruits and livestock, could be addressed in trade talks with the

EU. "We are very close to resolving those SPS issues from our perspective," he

said, adding an agreement was in sight "if we saw any kind of reciprocity on the

part of Europeans."

     Tariffs do not have to be on the table "initially," Perdue said, but

"certainly the SPS issues have to be addressed" as well as non-tariff barriers.

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

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