EU trade chief heads to Washington to soothe tensions

The European Union's trade chief is to head to Washington this week hoping to ease tensions with the Trump administration, as both sides continue to spar over digital tax and aircraft subsidies.

Former Irish Environment Minister Phil Hogan, who took office as EU Commissioner for Trade on December 1, will make his first official visit to Washington to meet his US counterpart, Robert Lighthizer.

The visit coincides with the signing of a new trade agreement between the US and China. Officials in the EU are concerned that the slow thawing of relations between Washington and Beijing could lead to the US president intensifying pressure on Europe.

Mr Hogan has been outspoken in his criticism of President Trump and his administration, last year accusing him of "reckless behaviour" over his use of tariffs as a means of getting concessions from trading partners. Hogan said at the time that the EU would “do everything we possibly can to get Mr Trump to see the error of his ways”.

A spokesperson for the European Commission said this week that Hogan's trip should be used as "a stepping stone in an effort to refresh and invigorate a positive transatlantic trade relationship”.

The US and EU are embroiled in a row over France's digital tax, which Washington has threatened to levy $2.4-billion of tariffs on French exports including cheese and champagne.

Washington says that the French plan to tax tech giants such as Facebook and Google discriminates unfairly against US companies. Paris says the measure is a necessary, temporary stopgap until some form of a taxation deal at an international level can be reached.

There are also ongoing tensions between the US and EU over subsidies to Boeing and Airbus, which led the US to impose $7.5-billion of tariffs on EU goods last October.

Brussels has repeatedly highlighted its desire to move on from the disputes and push forward a common agenda based on reforming the World Trade Organization (WTO) to deal with shared EU-US concerns, such as unfair competition from China.

However, last year Washington forces the suspension of the WTO's highest dispute settlement body by blocking the appointment of new judges and rendering it unable to function. The US argues that the appellate body had over-reached its powers.

“The trip will present an occasion to identify common ground and hopefully potential solutions to some of the issues that we have been discussing over the past weeks and months,” said a commission spokesperson.

Later this week, Beijing and Washington are set to unveil their "phase one" trade deal, raising hopes in global markets that the worst of the US-China trade war is over.

The US and EU agreed on plans for trade talks in 2018 but no progress has been made on the goal of the scrapping of tariffs on industrial goods following Washington's announcement that agriculture also be included in the discussions. Progress has been made, however, on more minor regulatory issues.

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