The Strategist

EU and USA sign 'Lobster deal', first tariffs reduction in 20 years

11/27/2020 - 05:22

The European Parliament has finally approved the first EU-USA customs reduction deal in about two decades, covering a small turnover of goods, the EP said.

"Parliament supported the agreement with 638 votes in favour, 45 against and 11 abstaining," a message says.

The EP notes that the agreement could become the basis for the resumption of "constructive transatlantic cooperation".

This transaction has already been dubbed 'lobster' because, as previously reported, under this agreement, the EU will lift tariffs on imports of live and frozen lobster products from the US for a period of five years, with deliveries to the EU exceeding $111 million in 2017. In turn, the United States will reduce duties by 50% on certain goods imported from the EU, whose average annual value is around $160 million. These include, for example, certain ready-made dishes and lighters.

This is the first tariff reduction deal between the EU and the USA in about 20 years, says the EP. It has now received all the necessary permits from the EU and will come into force once the decision is published in the EU's Official Journal. However, the application of the new tariffs will have retroactive effect from 1 August this year.

Trade relations between the US and the European Union are not perfect. In particular, the United States imposed import duties on steel and aluminium products in the first half of 2018 - 25% and 10% respectively. The EU has introduced reciprocal duties.

Last year, the WTO allowed the United States to impose duties on imports of goods from the EU of $7.5 billion per year as part of the EU Airbus subsidy proceedings. The WTO then also allowed the EU to impose duties on goods worth $4 billion a year in response to the support provided by the US for Boeing, and the EU responded to the States' Airbus duties in the autumn.