Status: 04.12.2022 04:54
In the dispute between the US and the EU over US subsidies, the head of the EU Parliament’s Trade Committee, Lange, no longer expects a negotiated solution. He is therefore asking that a complaint be filed with the WTO.
The head of the Trade Committee in the EU Parliament, Bernd Lange (SPD), no longer believes in a negotiated solution to the conflict with the US because of US President Joe Biden’s social and climate protection package worth billion. The European Union must therefore file a lawsuit against the United States with the World Trade Organization (WTO) in the coming months, Lange demanded to the newspapers of the Funke media group.
The lawsuit aims to clarify “that the US actions are clearly not compatible with WTO regulations,” Lange said. He was speaking ahead of an EU-US Trade and Technology Council meeting on Monday at which representatives from Washington and Brussels want to discuss huge European concerns about subsidies in the US climate protection and social package.
Distortion of competition through energy prices
Lange assumes that some small changes for the implementation of the so-called Inflation Reduction Act (IRA) can still be agreed upon in the negotiations. “But I don’t think much is going to change substantively because the law has already been passed.” That is why the EU, for its part, must now step up its support for domestic industry. “We also have to look at whether and how we can reduce energy prices for industry, which are currently up to ten times higher than in the US,” said Lange.
Union economics expert in the EU Parliament, Markus Ferber (CSU), also called for European countermeasures: If the US does not take a step towards Europe at Monday’s meeting, the EU Commission would have to think about activating the called European Trade Defense Instruments, the EPP Group’s economic policy spokesman told Funke newspapers. “That would certainly be the nuclear option and anything but desirable in the current situation,” Ferber said. However, the European side must “put all instruments of torture on the table”.
Fear of disadvantages and emigration
The IRA is a multi-billion dollar climate and social protection package agreed to in the United States in August. Provides $370 billion (about €357 billion) for climate protection and energy security – including subsidies for electric cars, batteries and “Made in the USA” renewable energy projects. The subsidies are met with a lot of criticism in the EU: there are fears that European companies will be disadvantaged and that important sectors of the economy will migrate.
Different voices of federal policy
Finance Minister Christian Lindner has already warned of a trade war with Washington. “The US is our valued partner, but at the same time there is an extremely protectionist economic policy,” he told “Welt am Sonntag”. At the same time, he pointed out that the German economy – unlike the French one, for example – is closely linked to the US market. “So Germany cannot have any interest in a trade war, but must rely on economic diplomacy,” the finance minister said.
At first, SPD leader Saskia Esken welcomed the US commitment to an ambitious climate protection policy. She added in “Welt am Sonntag”: “Unfortunately, the US legislation also clearly has protectionist overtones, which we view very critically.” Green leader Omid Nouripour also told the newspaper: “We must not put obstacles to each other on the path to climate neutrality.” The spokeswoman for economic policy for the EU parliamentary group, Julia Klöckner, fears that European companies will be “at a great disadvantage”.