EU seeks swift engagement with US

The European Union is looking to engage quickly with the Biden administration to resolve major trade irritants, including disputes over digital taxes and commercial aircraft subsides, EU Director General for Trade Sabine Weyand said on Friday.

Weyand told an online forum that the EU is planning to present a World Trade Organization (WTO) reform proposal in February and is now willing to consider reforms to restrain the judicial authority of the WTO’s dispute settlement body.

The United States has for years complained that WTO Appellate Body makes unjustified new trade rules in its decisions and has blocked the appointment of new judges to stop this, rendering the body inoperable.

The Trump administration, which leaves office next Wednesday, had threatened to impose tariffs on French cosmetics, handbags and other goods in retaliation for France’s digital services tax that it said discriminated against US tech firms.

Washington said last week it would put those tariffs on hold as the US Trade Representative’s (USTR) office looked into similar digital taxes planned by Austria, Britain, Italy, Spain, Turkey and India.

Weyand told the event hosted by the Center for Strategic and International Studies in Washington that she saw the decision to not collect tariffs on French goods as a positive sign.

“We are working on an EU proposal and we have timed it so that it coincides with the OECD process and I think there is a possibility to discuss it,” Weyand said.

The OECD has been overseeing an effort by countries to come up with a global solution to digital taxation, but the talks bogged down last year.

Any solution would be nondiscriminatory and in fullcompliance with WTO rules, Weyand added.

“What we had said to the previous administration was that if you have concerns about WTO compatibility, then to take it to the WTO. What we cannot accept is that the US takes the law into its own hands.”