Germany sees 50% chance for EU-US trade deal, possibly in 2019

The German share price index DAX graph is pictured at the stock exchange in Frankfurt. (Reuters pic)

BERLIN: German Economy Minister Peter Altmaier sees a 50% chance of the European Union striking a trade agreement on industrial goods with the US, possibly this year.

“There is a mutual interest to avoid an escalation and to seek a reasonable solution,” Altmaier told reporters after he met with US Trade Representative Robert Lighthizer on Thursday in Washington.

If the two sides would respect each others’ key interests, an agreement could be reached by the end of 2019, he said.

Talks between the EU and the US on a trade deal have been stalled as Europe rejects America’s calls to include farm products in a deal.

Hanging over the talks is President Donald Trump’s threat to impose tariffs of as high as 25% on imported vehicles and parts, which would hit European automakers particularly hard, and the EU’s threat of retaliation.

That would mean the end of the fragile truce struck a year ago in the wake of American duties on European steel and aluminium, which provoked a tit-for-tat response from the EU targeting firms in politically sensitive states like Kentucky and Wisconsin.

Altmaier said no concrete proposals were discussed during his meeting with Lighthizer.

The Germany minister said he told Lighthizer that the US plans to investigate a French tax on big tech companies for revenue earned in France should not impede the EU-US trade talks and that a global solution to digital taxation is still preferable.

An international agreement would prevail over any national digital tax, and “we should simply step up our international efforts in the OECD,” Altmaier said at an economic conference in Washington.

The Organization for Economic Cooperation and Development is aiming to reach a global consensus on taxing digital services across borders by 2020.