Competence on Trade is vested in the European Commission under the Common Commercial Policy in the EU Treaties. In that regard, the Commission proposes legislative and negotiating Proposals which Member States and the European Parliament then consider. Once concluded, all Trade Agreements are considered by the Member States in Council for formal approval. In considering Commission Proposals for Negotiating Directives - or Mandates - the Member States take due regard of the overall trade policies of the Union, and the Commission can only commence formal trade negotiations once the Member States have given their approval. In this regard, both the Commission and the Member States, as well as the European Parliament, would consider how to reflect the latest EU policies on issues such as labour rights, consumer standards, the environment, sustainable development and so on, including, where appropriate, climate change.
When considering trade discussions with the United States, it is important to record that the European Union and the US have the largest bilateral trade and investment relationship and enjoy the most integrated economic relationship in the world. The EU and the US economies together account for about half the entire world GDP and for nearly a third of world trade flows. This relationship has proved indispensable not only for the prosperity of both sides of the Atlantic for many years but for many other countries including least developed countries who participate in global supply chains. Likewise, Ireland and the US have a longstanding bilateral relationship which has proved hugely beneficial in many ways for both our countries. Taking these factors into account, Ireland and the EU remain fully committed to a continued strong partnership with the US as equal partners.
It is in this context that Commission President Juncker met with US President Trump in July 2018, in Washington, to launch a new phase in the relationship between the United States and the European Union aimed at de-escalating growing trade tensions, which would impact the jobs of our citizens. In the Joint Statement the EU and US agreed to dialogue on a range of specific, yet limited, trade matters.
In September 2018, EU Trade Commissioner Cecelia Malmström met U.S. Trade Representative (USTR) Robert Lighthizer to initiate the Executive Working Group (EWG), established to improve trade relations between the US and EU. The EWG has met a number of times since, to discuss the scope of future formal negotiations, most recently in Washington on 6th March 2019. As part of the Commission's commitment to transparency, an interim progress report was published on 30th January 2019, providing a detailed overview on the state of play of the talks to that date.
On 18th January 2019 the EU Commission adopted proposals for "Negotiating Directives" - or Mandates - for its proposed trade talks with the United States: one on conformity assessment, (making it easier for companies to prove their products meet technical requirements on both sides of the Atlantic) and one on the elimination of tariffs for industrial goods (excluding agricultural products). The EU Commission published the draft mandates at the same time as submitting them to the EU Member States.
Subsequently on 19th February 2019 the European Parliament's Committee on International Trade (INTA) endorsed the launch of formal trade negotiations with the United States. It is anticipated that a further non-binding plenary vote of the European Parliament will take place on the resolution on 14th March 2019.
If approved by Member States in Council, the finalized mandates would set the parameters for formal negotiations to commence. However, it is important to note that these two mandates are of a limited scope, covering two distinct areas agreed in the July 2018 Joint Statement. As I have indicated, they do not constitute a mandate for negotiations on a comprehensive Free Trade Agreement, which would involve negotiations across a far wider range of sectors and topics including sustainable development. Additionally, while these negotiations are proceeding both sides are committed to not introducing new tariff measures.
The de-escalation in trade tensions between the US and EU achieved by last July's accord has been of benefit to Irish trade interests and jobs. Equally, a possible future agreement on conformity assessment as well as the elimination of tariffs for industrial goods, would be a positive development to stimulate growth, create employment and continue to grow our economy.
Ireland, along with its EU partners, will determine its final position on the proposed mandates, taking account of issues such as climate and environmental factors and other sustainable development matters and also in the context of our desire for open, free trade and investment flows between Ireland and the US in a rules-based trading system supporting many thousands of jobs.
Separately, the EU has been negotiating a trade agreement with the four founding members of Mercosur (Argentina, Brazil, Paraguay, and Uruguay) for several years. If concluded an EU-Mercosur Free Trade Agreement would be the EU’s largest trade deal to date, four times the size of the trade agreement with Japan. The EU mandate to commence talks was approved in 1999 and aims to eliminate trade tariffs between the EU and the Mercosur region. Irish exporters are currently subject to trade tariffs, barriers and restrictions, when exporting to Mercosur and the proposed Free Trade Agreement should make exports from Ireland more attractive and potentially increase demand for Irish products.
Sectoral opportunities for Ireland in further enhancing a trading relationship with this region include software and services in telecommunications, financial services, digital content and travel, engineering products and services, life sciences, agriculture, food and beverages, and education services. On the other hand, Ireland like other Member States has strong concerns in relation to agriculture, especially the potential impact that these negotiations present to the EU beef sector.
To date, there have been 37 rounds of negotiations and negotiations are still ongoing with the next round planned for the week of 11th – 15th March in Buenos Aires.
Both the EU and Mercosur are each committed to implementing the Paris Agreement on Climate Change.