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US, Europe Seek to End Tariffs on Each Other's Products

  • Ken Bredemeier

File - Workers and trade union representatives from all over Europe hold a demonstration against austerity near the European Commission and Council headquarters in Brussels, March 2013.

File - Workers and trade union representatives from all over Europe hold a demonstration against austerity near the European Commission and Council headquarters in Brussels, March 2013.

The trade deal being negotiated between the United States and European Union could add $100 billion annually to the economies on both sides of the Atlantic Ocean, but the issues are complex and there is no guarantee that an agreement will be reached anytime soon.

The U.S. and the 28-nation EU started negotiations nearly two years ago and resumed them again this week in New York. The U.S. is the world's biggest individual economy and the EU, collectively, is even bigger.

Even though the U.S. and Europe collaborate militarily in the NATO alliance and annually carry out billions of dollars in business deals, existing tariffs and other barriers limit the economic activity from what it might be.

Both Europe and the U.S. say they want to eliminate custom duties on each other's products.

"In the 21st century it is anachronistic that Europeans and Americans still impose custom duties on each other's products," European Commission President Jean-Claude Juncker said last year. "These should be eliminated, quickly and completely."

The United States has taken the same stance. It ships $730 million in goods to the EU every day and notes that tariffs can make the difference between winning and losing a contract.

The U.S. says it wants to put itself on the same trading level as the EU's other free trade agreement partners, including Chile, Mexico, South Korea and South Africa.

The U.S. says tariffs, for example, add a 7 percent duty to the cost of American farmers' apples sent to Europe, while EU competitors' apples sent to the United States are duty free.

Conversely, the EU says some U.S. tariffs are as high as 30 percent on high value European products, such as hams, cheese, wine, liquor and chocolate, making them too expensive for American consumers and hard for European farmers to export them.

Conversely, the EU says American exporters face customs on such products as corn, soy beans and animal feed, boosting costs for European farmers and manufacturers.

The trade negotiations include discussions on labor and environmental standards, conflicting business regulations in the United States and Europe and corporate investment rules on both sides of the Atlantic.

The United States trade office says a deal would "promote U.S. international competitiveness, jobs and growth," adding to the 13 million U.S. and EU jobs already linked to transatlantic trade.

Some U.S. lawmakers, especially Democrats normally aligned with the country's Democratic president, Barack Obama, have voiced fears that a deal with Europe and a tandem trade pact with Pacific Rim countries would eliminate American jobs as U.S. corporations move some of their operations overseas.

In the United States, the prospect of new trade deals is winning more support from business-oriented Republican lawmakers who often have opposed Obama on a wide range of other issues.

In Europe, thousands of protesters took to the streets this past weekend to protest the possible EU deal with the U.S., saying it would hurt their workers. It is much the same claim as U.S. labor unions have voiced.

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