MNI POLICY: Hogan, Lighthizer Meet Thursday on Cyber Tax, WTO

--New EU Trade Czar's First Meeting With US Comes a Day After Phase One Signing

By Brooke Migdon

     WASHINGTON (MNI) - The European Union's new trade commissioner Phil Hogan

will meet with U.S. Trade Representative Robert Lighthizer Thursday in

Washington and seek to avoid a trade war over France's digital tax and farm

subsidies.

     It's Hogan's first trip to the U.S. as the EU's trade chief, having served

previously as Commissioner for Agriculture and Rural Development. The visit

comes a day after President Donald Trump and top Chinese officials are due to

sign a Phase One trade agreement. That ceremony will shed light on whether

leaders of the world's two largest economies have made progress on tough issues

such as intellectual property and farm trade that may also color EU talks. 

     The EU conversations are expected to focus on the immediate threat of U.S.

counter tariffs on $2.4 billion of imported French goods over alleged

discriminatory practices in France's new digital services tax, as well as U.S.

tariffs on several EU member countries following a World Trade Organization

ruling about aircraft subsides in October.

     Other longstanding and contentious issues -- like the inclusion of

agriculture in future trade negotiations and the recent dissolution of the WTO

Appellate Body -- will likely be discussed as well. The U.S. and the EU have

long been at odds over the EU's refusal to negotiate on agriculture, and

Europe's $10 billion agricultural trade surplus with the U.S. has further soured

the relationship.

     "There is room and there is an opportunity to come to an agreement on

issues when both sides are willing to make a deal," on agriculture, said David

Salmonsen, director of congressional relations at the American Farm Bureau

Federation. Salmonsen cited a deal on beef that Hogan and Lighthizer negotiated

that went into effect this year as evidence the two can work well together. 

     U.S. officials have said in the past that they will not sign a deal with

the EU that excludes agricultural provisions. The EU has sought to protect its

domestic producers and maintain its stringent health and environmental

standards.

     Dan Pearson, a former commissioner on the U.S. International Trade

Commission who met with Hogan in his previous role, said Hogan is "thoughtful

and engaging" and the in person visit suggests he sees a chance for a deal.

Pearson today works as a trade policy fellow at the nonpartisan Americans for

Prosperity.

     "Hogan knows the agriculture issues really well on the European side, and

Lighthizer certainly knows the agricultural politics well because that's played

into a number of things that they've done since he's been in office," Americans

for Prosperity's Pearson said. More pressing tariff disputes than farm products

will likely take a front seat in Thursday's meeting, he said.

     Hogan, Lighthizer and Japanese Minister of Economy, Trade and Industry,

Kajiyama Hiroshi, released a joint statement Tuesday following a trilateral

meeting in Washington promising the three will "continue cooperating" on

reforming the WTO. One of the WTO's decision making panels fell apart recently

as the Trump administration refused to nominate members to keep it going. 

     U.S. Treasury Secretary Steven Mnuchin this week also plans to meet with

French Finance Minister Bruno Le Maire to discuss a compromise on France's

digital services tax during the World Economic Forum in Davos. Le Maire said

last week that, following an earlier phone call with Mnuchin, the U.S. had

agreed not to introduce the proposed 100% duties before the summit in late

January.

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

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