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Wednesday, January 15, 2020 - 00:00

MNI POLICY: Hogan, Lighthizer Meet Thursday on Cyber Tax, WTO


--New EU Trade Czar's First Meeting With US Comes a Day After Phase One Signing

WASHINGTON (MNI) - The European Union's new trade commissioner Phil Hogan will meet with U.S. Trade Representative Robert Lighthizer Thursday in Washington and seek to avoid a trade war over France's digital tax and farm subsidies.

It's Hogan's first trip to the U.S. as the EU's trade chief, having served previously as Commissioner for Agriculture and Rural Development. The visit comes a day after President Donald Trump and top Chinese officials are due to sign a Phase One trade agreement. That ceremony will shed light on whether leaders of the world's two largest economies have made progress on tough issues such as intellectual property and farm trade that may also color EU talks.

The EU conversations are expected to focus on the immediate threat of U.S. counter tariffs on $2.4 billion of imported French goods over alleged discriminatory practices in France's new digital services tax, as well as U.S. tariffs on several EU member countries following a World Trade Organization ruling about aircraft subsides in October.

Other longstanding and contentious issues -- like the inclusion of agriculture in future trade negotiations and the recent dissolution of the WTO Appellate Body -- will likely be discussed as well. The U.S. and the EU have long been at odds over the EU's refusal to negotiate on agriculture, and Europe's $10 billion agricultural trade surplus with the U.S. has further soured the relationship.

"There is room and there is an opportunity to come to an agreement on issues when both sides are willing to make a deal," on agriculture, said David Salmonsen, director of congressional relations at the American Farm Bureau Federation. Salmonsen cited a deal on beef that Hogan and Lighthizer negotiated that went into effect this year as evidence the two can work well together.

U.S. officials have said in the past that they will not sign a deal with the EU that excludes agricultural provisions. The EU has sought to protect its domestic producers and maintain its stringent health and environmental standards.

Dan Pearson, a former commissioner on the U.S. International Trade Commission who met with Hogan in his previous role, said Hogan is "thoughtful and engaging" and the in person visit suggests he sees a chance for a deal. Pearson today works as a trade policy fellow at the nonpartisan Americans for Prosperity.

"Hogan knows the agriculture issues really well on the European side, and Lighthizer certainly knows the agricultural politics well because that's played into a number of things that they've done since he's been in office," Americans for Prosperity's Pearson said. More pressing tariff disputes than farm products will likely take a front seat in Thursday's meeting, he said.

Hogan, Lighthizer and Japanese Minister of Economy, Trade and Industry, Kajiyama Hiroshi, released a joint statement Tuesday following a trilateral meeting in Washington promising the three will "continue cooperating" on reforming the WTO. One of the WTO's decision making panels fell apart recently as the Trump administration refused to nominate members to keep it going.

U.S. Treasury Secretary Steven Mnuchin this week also plans to meet with French Finance Minister Bruno Le Maire to discuss a compromise on France's digital services tax during the World Economic Forum in Davos. Le Maire said last week that, following an earlier phone call with Mnuchin, the U.S. had agreed not to introduce the proposed 100% duties before the summit in late January.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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