MNI EXCLUSIVE: Italy To Push EuCo For EU-Wide US Tariffs Plan

--Upcoming EuCo Likely To Discuss A Common EU Stance: Govt Official

--'Soft Power' May Not Be Enough, But 'Hard' Power Last Resort

--A New Era Of Trade Disputes Are A Danger Best To Avoid

By Silvia Marchetti

     ROME (MNI) - Italy will likely push for a European-wide plan to address any

U.S. import duties imposed on the European Union to help avoid negative economic

repercussions across the bloc, a senior Italian government official told MNI. 

     "We aim to rally consensus among peer countries at the upcoming European

Council meeting on Mar 22-23 to define a common stance and possible steps

forward. But this is an extremely delicate and hazardous situation that requires

utmost prudence," said the source. 

     Prime Minister Paolo Gentiloni last week discussed the turn of events in

global trade policies with European Commission president Jean-Claude Juncker. 

     Rome, in line with the rest of the bloc, believes import duties are not the

correct way forward and that it is paramount to pursue dialogue with the U.S. to

define a clear trade framework. 

     "European states' concerns and commercial interests are the same. We all

want to avoid the U.S. extending its new import duties to key European products,

and not just agriculture. For now, the duties concern steel and aluminium

imports mainly from China, let's just hope there's no extension otherwise we

would need to step-up a common offensive," the official said. 

     It's not just a matter of raising Europe's voice through stronger 'soft

power', he warned. "That might not be enough anymore. The US administration's

protectionist measures were announced over a year ago and now they appear to

finally strike. Europe has always kept its dialogue channels open". 

     --WORST CASE

     The worst case scenario, were all diplomatic routes to fail and the U.S.

duties be extended to the EU, is that of resorting to different forms of 'hard

power' with potential retaliation on key US imports. 

     "The outlook is very uncertain: but there's a risk that if things do go

bad, Europe would be forced to place duties on American imported goods and then

we'd be back to the era of commercial disputes of past decades," argued the

source. 

     The last thing both the U.S. and the EU need, he added, is a return to

endless reciprocal appeals filed to the World Trade Organization (WTO). 

     Talks between European and American representatives are currently facing

deadlock and coming days are set to be crucial for the future of transatlantic

trade relations. 

     Brussels hasn't yet abandoned the path of dialogue, but tensions on both

sides of the Atlantic are mounting and the official warned "time could be

running out".

     --FERRARIS AND FASHION 

     Rome is worried about the impact of possible U.S. import duties on

'Made-in-Italy' products, mainly autos, machinery and fashion. 

     According to recent data, Italy has doubled its export volumes to the US

over the last decade. Last year Italian exports to the US reached a record peak

volume of E25 billion, with steel products accounting for over 10% of total

European sector exports, up 19% from 2016. 

     The bilateral trade balance currently favours Italy. Rome's Economic

Development ministry reports that since 2009 Italian exports to the U.S. have

risen 137% versus just a 58% rise for U.S. exports to Italy. 

     "The European Central Bank has repeatedly warned of the negative impact

global protectionist measures could have on the eurozone's outlook and one thing

is clear: Europe will not sit and watch in a critical moment when its economy is

finally growing again,", said the official. 

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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