“Failure to agree on steel agreement at US-EU summit… Negotiations until the end of the year”

2023-10-20 13:41:00

While the summit meeting between the United States and the European Union (EU) was held on the 20th (local time), it was reported that the so-called ‘steel agreement’, which was the subject of great interest, failed to reach an agreement.

According to multiple sources familiar with the matter, foreign media such as Bloomberg News and Politico reported that the two sides failed to reach an agreement in the final working-level negotiations on the ‘Sustainable Global Steel and Aluminum Agreement’ (GSSA) held ahead of the meeting on this day.

Accordingly, it appears that the final announcement of GSSA at today’s summit will be difficult.

GSSA is an agreement being discussed starting in 2021 to end the dispute between the US and EU, which was triggered when the US began imposing tariffs of 25% and 10% on imported steel and aluminum, respectively, starting in 2018 during the Donald Trump administration.

After the negotiation deadline of the 31st of this month passes, the United States’ high tariffs and the EU’s retaliatory measures will automatically resume from January next year.

Accordingly, there has been speculation that an attempt will be made to reach an agreement at this summit, which will be held ahead of the expiration of the negotiation deadline.

However, as the differences between the two sides have not been narrowed down over the details, today’s summit is expected to end with an announcement that instead of reaching an agreement, the negotiation deadline will be extended until the end of the year and consultations will continue.

In this regard, Deputy Trade Minister Cianna Mendes, who holds the EU’s second-half rotating presidency, also met with reporters at the EU Trade Ministers’ Meeting held in Valencia, Spain, and said that she expects a steel agreement with the United States to be reached by the end of the year.

The conclusion of a mineral agreement, another major trade issue between the two sides, is also unclear.

According to the draft joint statement obtained by Bloomberg, it contained only the general statement that “progress has been made” in discussions on the mineral agreement.

The draft instead stated that negotiations would continue over the next several weeks.

In order to receive tax credits for electric vehicles under the implementation of the US IRA, key minerals used in batteries, such as lithium, nickel, manganese, graphite, and cobalt, must be procured from countries with which the US has signed a free trade agreement (FTA), but the EU is not a signatory to the FTA.

Accordingly, the two sides are discussing a core minerals agreement that will allow European companies to apply the same conditions as those in FTA countries.

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