German Chancellor Angela Merkel raised expectations that a future EU-U.S. trade deal was being considered after her recent visit to Washington.
Speaking at the opening of 70th annual Hannover Messe trade fair on Sunday, Merkel said that Germany was opposed to trade barriers and protectionism, and would strive to work out trade deals like the one between the EU and Canada. She said:
“I also feel very encouraged by my visit to the United States that negotiations between the EU and the United States on a free trade agreement … are also being looked at.”
The comments from Merkel came after the London Times had reported earlier that President Trump had started to like a trade deal with the bloc after his meeting with Merkel in March.
The paper quoted a senior German politician as saying that President Trump repeatedly asked Merkel to sign a bilateral deal, but she told the U.S. president that such a deal could only be negotiated with the EU.
Although Ms. Merkel didn’t mention the exchange, she said that she was encouraged of such prospects after her visit to the U.S., and added that EU’s first priority was to get done on the deal with Japan.
A source told Reuters that there was a realization in the Trump administration that a trade deal with the EU – allowing a tariff-free exchange of goods and services – was more important to the U.S. than a trade deal with post-Brexit Britain.
One of the first acts of Trump after assuming office was to cancel U.S. participation in the TPP (Trans-Pacific Partnership), a trade deal among Pacific Rim countries.
The U.S. had started negotiating the Transatlantic Trade and Investment Partnership with the EU under the former President Barack Obama, but a deal couldn’t be worked out.
President of the BDI industry group, Dieter Kempf, warned the U.S. against opting protectionist policies.
“Those who have trouble understanding how trade surpluses and globalization effects are created are invited to come here and take a look.”
He also warned the EU leaders to stick to its four basic freedoms of its single market when negotiating with Britain about it leaving the bloc. He said:
“We cannot let the four basic freedoms of the EU be diluted by special arrangements or cherry-picking.”
Angela Merkel insisted that the EU would maintain them saying:
“We want to continue good relations with Britain while maintaining the advantages of the single market for ourselves.”