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U.S. Says It’s Concerned EU Won’t Drop Tariffs in Accord

(Corrects annual economic output in fifth paragraph of story published March 12.)

March 12 (Bloomberg) -- The U.S. says the European Union has backed away from a pledge to cut duties on American imports, adding to tensions over tariffs as the world’s largest commercial partners seek a trade deal.

Reducing $10.5 billion in tariffs between the U.S. and EU was a key goal in a report last year on the proposed Trans-Atlantic Trade and Investment Partnership. The U.S. complained after the EU’s top trade official last month said the U.S. offer to remove tariffs wasn’t ambitious enough.

“The United States remains committed to the goal, written into the High Level Working Group Report and endorsed by both our leaders, of eliminating all duties on bilateral trade,” Trevor Kincaid, a spokesman for the U.S. Trade Representative’s office, said today in an e-mailed statement. “Recent actions by the EU seem to back away from this goal and we need to know if it stands by its commitment or not.”

The disagreement highlights challenges in reaching a trade accord between the U.S. and 28-nation EU, which would expand the world’s largest bilateral commercial relationship. The two sides have sparred for decades on issues including agricultural protections and food-safety standards. Negotiators this week are meeting in Brussels to continue talks to create the world’s largest free-trade area.

An accord would integrate the two economies, which produce about $33 trillion in combined annual economic output, by lifting tariffs and accepting each others’ standards on goods including automobiles and chemicals.

Dow, Boeing

EU and U.S. trade officials originally set the end of this year for completing the talks.

Kasper Zeuthen, an EU spokesman in Washington, declined to comment on the U.S. complaint today.

Eliminating the estimated $6.4 billion in annual EU tariffs on U.S. imports would benefit major exporters including Dow Chemical Co., Boeing Co. and DuPont Co., according to a November 2012 Bloomberg Government study. U.S. chemical producers would pay about $1 billion less a year, it said.

A report in 2013 outlining objectives for the talks recommended eliminating all tariffs between the U.S. and EU, noting such a step may be more difficult in areas that have traditionally been protected, such as agriculture.

“In the course of negotiations, both sides should consider options for the treatment of the most sensitive products,” according to the report.

EU Trade Commissioner Karel De Gucht told reporters in Washington last month that talks were entering a more difficult phase as the parties sort out regulatory differences. He also said the U.S. hadn’t matched the EU’s initial tariff-reduction offer, which he described as ambitious.

“We have to demonstrate that we are in a position to have an ambitious deal on tariffs -- on both sides, by the way,” De Gucht said, according to a report from Bloomberg BNA.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net Steve Geimann

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