EU and US and Two Different Approaches

EU has a dispute with US about Boeing. EU don't like it that US government subsidy a lot of money in developing of planes. It is harmless to Airbus production and competition.

US don't comply with WTO rules on subsidies. US illegally support manufacture of Boeing. In its ruling of 28 March 2019, the Appellate Body confirmed that US continue to invest their money in boeing. US plan to subsidy around $6 billion dollars during 2006-2040.

Trump government plan to impose tarrifs on EU cars.

Trump administration thinks that European cars are threat to US economy. Angela Merkel notice that most of European cars are made in US. Trump has threatened levies about 25% on import European cars. EU promise not to impose new tariffs until the US does the same.

EU and US has a dispute about GMO products. Some countries in EU cultivate genetically modified (GM) products ( Spain, Portugal) others allow only imports (e.g. Germany). Switzerland which is not part of EU has a moratorium on GMO products.

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In 2013 EU authorized 46 GM plants including 3 types of flowers. Some main trading partners of EU approved more GM plants ( USA-92, Canada-89, Japan-87). These large differences had an effect on a trade between these countries. One of the main reason why EU has strong regulations it is comparative disadvantage of European farmers with GM plants.

Eropean farmers and other group of people has a strong influence on desicon of cgovernment. They can create framework against GM crops. According to Swinnen and Vandemoortele theory, small differences in consumer preferences can affect differently on EU .

If customers preferences change EU will not switch its policy and technology if the costs are high.

If people decided GM products unsafely they cannot change solution of EU because WTO rules was designed in a way that if it was proven scientifically it cannot be changed. EU and US has two different approaches. EU- social rationally approach. USA-scientific rationally approach . The divergence had resulted in different frameworks and different opinions about assessing GM products.

Convention on Biological Diversity allows social economic consideration. It is not consistent with the agreement that EU signed as a part of membership WTO. It is not consistent with the agreement on sanitary and phytosanitary measures, signed in 1994, that do not allow to rely on a social rationally approach.

The GM Trade Conflict

EU had moratoria on biotech products.

1. A general moratorium on biotech products.
2. A moratorium on specific products.
3. A moratorium on a number of already approved GM products.

Another countries (USA, Canada, Argentina) didn't agree with this statement (13 and 14 may 2003).

EU is working under the CBD and the CPB agreement. WTO ruled that the agreements are not relevant in case of complaining countries have not ratified it too. Top 5 GMO producing countries in 2014: USA, Brazil, Canada, Argentina, India. USA, Brazil, Canada have not rarified the CBP (Convention on Biological Diversity, 2015). It means that dispute can happen again soon.

Removal tariffs on Merchandise Export

USA wants to eliminate tariffs on exports and have the same opportunity as non-EU countries who are members of EU trade agreement (Chile, South Korea, Mexico, and South Africa). The US is the largest exporter of agricultural products around the world. Their export is totaling $145 billion. Only 7% are destined for EU compare with 21% export to US. US exporters of olive oil pay $1680 per ton while EU producers pay $34 per ton on export.

Service

The EU wants to open the US banks but also retain health care system and culture. US has three goals: open EU companies to US service companies, exercise high level of regulation of the finance and investment industry in Europe, remove nationality of service or provider.