The meeting of the US-EU Trade and Technology Council on December 5 became the second attempt by the parties to agree on a change in the US law to reduce inflation (IRA). A document that threatens the European economy and, in fact, split the “united West”will enter into force as early as January, so that in Brussels more and more there are calls for a coordinated response, including proposals to approach the World Trade Organization. However, the European Union is unlikely to take countermeasures against the United States, Izvestia was told in the European Parliament.
European discontent
Between Washington and Brussels, which for a long time acted as a united front, there has been a serious split: if earlier they adhered to the policy of “do not wash dirty linen in public”, now There is growing criticism of the United States from representatives of the European Union. It was the US Inflation Reduction Act (IRA) that was to blame. come into force 1st of January.
The adopted document, in particular, provides energy benefits to foreign companies that have moved to the United States.. The law also provides for the allocation of state subsidies in the amount of almost $370 billion to support the green industries of the United States economy, as well as tax deductions of up to $7.5 thousand for those who will buy electric vehicles assembled in America. Such measures have seriously worried European countries, which, in addition to the energy crisis, may face an outflow of investments across the Atlantic.
— The Inflation Reduction Act discriminates against European companies by offering massive subsidies for US-made products. This will unfairly put non-American companies at a disadvantage and deal a blow to the European economy, which is already facing serious economic consequences of the “conflict in Ukraine,” Gunnar Beck, a member of the European Parliament’s Committee on Economic and Monetary Affairs, told Izvestia.
According to him, German companies are already suffering from a loss of competitiveness amid rising energy prices triggered by EU sanctions on Russian gas and oil. However, despite the potential harm that the updated US legislation will cause Germany, Berlin will not introduce countermeasures against American companies, the MP is sure. Gunnar Beck also doubted that another major player, France, would take similar actions.
However, it seems that some European politicians are more radical. So, Chairman of the Trade Committee in the European Parliament Bernd Lange urged file a complaint against the US with the World Trade Organization.
“I admit that a few small changes in the implementation of the IRA can still be agreed upon during the negotiations. But I don’t think that anything will change significantly, since the law has already been adopted,” the MEP added. Markus Ferber, another EP MP, agreed with him, emphasizing: EU should consider activating ‘trade defense’ tools.
The need for a coordinated response to the IRA was thought not only by individual members of the European Parliament, but also in the European Commission. Thus, according to EC President Ursula von der Leyen, EU must adjust pan-European rules to make it easier for public investment in green transformationand reassess funding. Wherein The EU is not interested in a trade war with the US, so Brussels will respond to the anti-inflation law “in an adequate and carefully balanced manner”she assured during a speech at the College of Europe in Bruges on 4 December.
However, the likelihood of a collective response to Washington’s actions is still small, Gunnar Beck believes.
— I don’t think there will be any EU response to the US inflation lawand neither collective nor individual on the part of some European state, the politician told Izvestia.
Attempts to negotiate
With less and less time left until the day the IRA goes into effect, US and EU intensify negotiationsto somehow mitigate the consequences for European companies. The first attempt to change the situation was the visit of French President Emmanuel Macron to Washington and negotiations with the head of the White House, Joe Biden. Nonetheless the meeting can be called successful only with a stretch.
French leader slams anti-inflation law. He warned that this would put many jobs at risk as European companies lose their investment appeal. The US President, in turn, acknowledged the shortcomings of the updated legislation, but did not apologize to the European partners.
“The US does not apologize, and I, the author of this law, will not apologize. There are times when you write a massive piece of legislation that provides for the largest investment in climate change in history, it can fail and require changes to be agreed upon,” Biden said at a press conference following the meeting.
However, one cannot speak of a complete failure of the negotiations. According to the source Reuters in the French Ministry of Finance, the leaders of the two countries still managed to make “significant progress” on how to reduce the negative impact of the IRA on Europe. For example, the White House could, through executive orders, grant the EU the same level of exemptions as for countries that have a free trade agreement with the United States.
The second in a month attempt to come to a common denominator should be a meeting of the US-EU Trade and Technology Council. Its representatives gathered on December 5 at the University of Maryland (Washington). However, despite the need to reach an agreement, the EU participants are quite negative. On the eve of the event, French President Emmanuel Macron pointed to a “out of sync” in relations between the Old and New Worlds. Before Commissioner for the Internal Market Thierry Breton in principle refused participate in the eventsince the IRA and the concerns of the European side about the document will be given too little time: 45 lunch minutes are allotted for discussion of the law.
Director of the Franklin Roosevelt Foundation for the Study of the United States (MSU) Yuri Rogulev also urged not to hope for a change in the law in the near future. According to him, America is quite satisfied with the current situation – Washington only winsboth politically and economically, and the events taking place in the world make it possible to weaken Europe, so that it would be easier for her to manage and dictate terms.
— Most of all, Europeans are outraged that the United States legalized all these measures.. To change something there, you need to change the law itself, adopt amendments, and this is not such a simple procedure,” he added in an interview with Izvestia. — I don’t think that Americans will give up their positions for the sake of Europe, especially now: with the adopted law and with the general mood of the United States “our interests come first.”
At the same time, the agenda of the summit itself, outlined by the US authorities, is rather vague. At the White House reportedthat during the meeting the participants will emphasize “the importance of the transatlantic relationship and the need to achieve economically significant results for citizens and economies on both sides of the Atlantic.”
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