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Cini: European Union Politics 2e

Chapter 14

EU-US Trade disputes

The American-European trade and investment relationship is the largest in the world, but differing ideas about how to protect citizens and regulate business are testing the economic relations between the US and the EU. The US and the EU are embroiled in an increasing number of trade disputes, involving such issues as bananas, genetically modified (GM) foods, beef hormones and the Airbus-Boeing dispute. One of the latest incidents of the trans-Atlantic trade dispute emerged when President Bush introduced the US steel tariff on 5 March 2002, ranging from 8 to 30% on an assortment of imported steel products for three years (CNN 5 March 2002; Financial Times 6 March 2002; The Economist 7 March 2002).

The World Trade Organisation (WTO) has ruled that tariffs imposed by the US on some steel imports violate international trade rules. The EU was preparing to retaliate against the US inflammatory trade sanctions, and lodged a formal complaint at the WTO in co-ordination with countries including China, Japan, South Korea and Brazil. Moreover, the WTO joint dispute settlement consultations on the US steel safeguards, under the Dispute Settlement Understanding on Thursday 12 and Friday 13 April in Geneva, between the EC, Japan, Korea, China, Switzerland and Norway on one side and the US on the other side, delivered a very clear signal of the strong concern about the US protectionist measures among all the players on the global steel market. According to the Financial Times (10 November 2003), Pascal Lamy, the former EU trade commissioner said the EU had little choice but to insist on compliance with the WTO rules, as the US has done in previous disputes over bananas and beef hormones. The New York Times (5 November 2003) quoted Fred Bergsten, as saying the risk of a trasn-Atlantic war was rising. However, the reaction to the most recent dispute over US safeguard measures on its imports of steel products indicates the EU's economic power is a significant threat to the US.

Web Links

European Commission DG External Relations
europa.eu.int/comm/external_relations/

Activities of the European Union – External Relations
europa.eu.int/pol/ext/index_en.htm

EU Politics News Online
www.eupoliticstoday.com/category/ExternalRelations

EU for Journalists – External Relations
www.eu4journalists.com/english/external_relations_trade_development/

LSE European Foreign Policy Unit
www.lse.ac.uk/Depts/intrel/EuroFPUnit.html

Further Learning Resources

Hill, Christopher and Smith, Karen, E. (ed) (2000), European Foreign Policy: Key Documents, London, Routledge.

Smith, Karen, E. (2003), 'The European Union: A Distinctive Actor in International Relations',The Brown Journal of World Affairs, Vol. IX, Issue 2, pp.103-13.

Allen, David and Smith, Michael, 'External Policy Developments', Annual Review of Journal of Common Market Studies (every September since 2000).

Pollack, Mark, A. and Petersman, Ernst-Ulrich (eds.) (2004), Transatlantic Trade Disputes: The EU, the US, and the WTP , New York, Oxford University Press.