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EU, U.S. to commit to remove all duties on transatlantic trade

An EU flag and an U.S. flag are pictured in front of the German Finance Ministry before a meeting between German Finance Minister Wolfgang S
An EU flag and an U.S. flag are pictured in front of the German Finance Ministry before a meeting between German Finance Minister Wolfgang S

By Barbara Lewis and Robin Emmott

BRUSSELS (Reuters) - U.S. President Barack Obama and European Union leaders will promise to remove all tariffs on bilateral trade at a summit on March 26, an ambitious step towards the world's largest free-trade deal, according to a draft statement seen by Reuters.

The joint declaration, if delivered as laid out in the draft, seeks to overcome tensions following Washington's offer to cut its duties by less than the Europeans had hoped for and after Brussels pledged to remove almost all of its own tariffs.

"The EU and the United States are firmly committed to concluding a comprehensive and ambitious Transatlantic Trade and Investment Partnership," the draft statement reads, referring to U.S.-EU free-trade talks by their official name.

"Those goals include eliminating all duties on bilateral goods trade," says the statement, which will be delivered at the end of the day-long summit in Brussels.

The statement is subject to further negotiations with the United States.

The summit will seek to give fresh momentum to tough talks on a transatlantic trade deal encompassing half the world's economic output in the hope that an accord can bring gains of around $100 billion a year for both sides.

It will also try to reach common ground on Ukraine, climate change and to assuage EU concerns about U.S. spying.

Trade negotiators have said they aim to finalize a deal by the end of this year, but they must also convince consumers that a deal is beneficial at a time of rising concern about its impact on issues such as the environment and food safety.

Tariffs between the United States and the European Union are already low, and the greatest economic benefits of an accord would come from dropping barriers to business.

But in a marketplace of 815 million people, moves to lower the cost of trade are beneficial for companies, particularly automakers such as Ford, General Motors and Volkswagen, with U.S. and European plants.

EU cars imported into the United States are charged a 2 percent duty, while the EU sets a 10 percent duty on U.S. cars. Including even higher duties for trucks and commercial vans, the burden for automakers amounts to about $1 billion a year.

The United States is seeking a similar trade pact with 11 other nations around the Pacific and Southeast Asia but still faces big differences on import tariffs, particularly with major trading partner Japan.

OPEN, FREE, SECURE INTERNET

Obama and EU leaders will also promise to guarantee a secure Internet governed by many parties, not just the United States, according to the draft summit statement.

Countries from Germany to Brazil are seeking to shield their Internet traffic from U.S. surveillance following revelations that the U.S. National Security Agency spied on U.S. allies including German Chancellor Angela Merkel.

"We share a commitment to a single, open, free and secure internet, based on an inclusive, effective, and transparent multi-stakeholder model of governance," the draft statement said. "We recognize the global dimension of the Internet and that it has become key infrastructure."

U.S. officials in Brussels could not immediately be reached for comment.

EU and U.S. negotiators are holding a fourth round of talks on the trade pact this week in Brussels, a month after the European Union and the United States revealed the extent to which they are willing to open up to each other's goods.

Officials familiar with the EU's proposal have told Reuters the European Union offered to lift 96 percent of existing import tariffs, retaining protection for just a few sensitive products such as beef, poultry and pork.

However, the U.S. offer was not as high, according to EU trade chief Karel De Gucht, who declined to give details. Some media reports say the U.S. level was 88 percent.

"The U.S. offer is less ambitious so we have told them very clearly that they have to match our offer before we can proceed," De Gucht told Reuters in an interview on February 28. "That's a fact of life."

(Editing by Hugh Lawson)

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