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France welcomes moratorium in the US-EU trade tariffs

Publié le March 16, 2021
Interview given by Mr. Franck Riester, Minister Delegate for Foreign Trade and Economic Attractiveness, attached to the Minister for Europe and Foreign Affairs, to Vitisphè (Paris - March 12, 2021)

Did the agreement between the United States and the European Union surprise you. Did you celebrate it with a glass of wine?

THE MINISTER – That was de rigueur! Together with our European partners, we worked hard to secure this agreement, which we’d wanted for a long time. The French President and the Government made extremely active efforts to begin this de-escalation with the Biden administration as soon as possible. Some encouraging signs appeared when President Biden took office, and for example, during her hearing in the Senate, the future trade representative, Katherine Tai, clearly expressed her wish to see the Airbus-Boeing issue “land”.

So the mutual suspension of surcharges wasn’t really a surprise, and it’s excellent news for the wine-growing sector, for which the American market is often the first export outlet.

The agreement also proves that our strategy of firmness was the right one. To earn respect you sometimes have to bang on the table. By imposing its own surcharges on American products as soon as the World Trade Organization (WTO) allowed us to in November, without waiting for the new administration to take office, the European Union restored a balance of power that will now enable us to negotiate on an equal footing with the United States and definitively settle the Airbus-Boeing dispute. We took that decision and always refused to get into a tariff escalation: at every stage, we held out our hand to the United States. They finally took it, and we’re all delighted.

French wine and spirits exporters are relieved to escape US surcharges for four months; can they take it as given that the Airbus-Boeing conflict will no longer affect them in future?

Be careful, this agreement is a ceasefire, not a peace treaty. In practical terms, it means that identical surcharges of 25% will be restored after the four-month moratorium if the United States and European Union don’t manage to bring the Airbus-Boeing dispute to an end by then. However, in reality no one on either side of the Atlantic has an interest in us falling back into an escalation. The only winner from that would be China, which massively subsidizes its aerospace industry to the detriment of both Airbus and Boeing, while we exhaust ourselves in a pointless confrontation. Our American partners are aware that the real challenge today is to propose new rules governing public support for aerospace and oppose unfair practices.

Are you confident about settling in four months a conflict that has lasted 17 years?

Now that the duties are temporarily suspended, we must obviously “convert the try”. I’m optimistic. The timeframe is short, but I believe time pressure can be useful in getting results – especially as we’re not starting from scratch, and things have been speeding up over the past few months. Some proposals are already on the table. The negotiations won’t be easy, but the window of opportunity has opened and I’m convinced that reason will prevail.

In concrete terms, from when does the suspension of 25% customs duties apply in American ports for French wines and spirits?

Since 11 March – it’s been done! Those surcharges of 25%, which accounted for a shortfall of several hundred million euros for the industry in 2020, have now been suspended. It’s time to head off again at full throttle to conquer the American market.

Are you advising French operators to stock up on the US market in case duties are reintroduced in July? Are new tools going to be added to the Export recovery plan to support French shipments to the US market and regain market share?

This is the purpose of the sector’s online shop window, which we launched at the beginning of February. We’ve also taken into account the new needs for recruitment which have come to light, and with representatives of the profession we’re going to propose an unprecedented offer of International Corporate Volunteering (VIE) designed for the sector, for influential international markets. It’s a two-year mission for a young person, whose work is wholly geared to the sector and its export needs, and it’s fully financed under the France Relance recovery plan. This ad hoc mechanism will be added to the cross-cutting support for the VIE scheme which we’re expanding by financing 3,000 VIE cheques for €5,000 for SMEs and intermediate-size companies.

In the next few months, we’ll also be launching a huge publicity drive on the excellence of French know-how and products based on the France brand. Its sectoral sub-label, Taste France, which you’re very familiar with, will obviously be the standard bearer for the wine industry!

Does the French Government still support the request for the European Commission to create a compensation fund? Have you received a reply to the letter you wrote jointly with the agriculture and economy ministers?

Bruno Le Maire, Julien Denormandie and I sent a letter to the Commission asking for more European solidarity for the sector. I reiterated the importance of the wine industry in France again during my joint hearing with Commissioner Valdis Dombrovskis in the National Assembly on 9 March.

We’re obviously continuing work to provide support for the sector, in addition to the many tools announced in January, including in relation to the health crisis. So our request for a compensation fund is still relevant today.

How can France ensure that its vineyards will no longer be future targets of trade conflicts which have nothing to do with them?

You’re right: wine producers have been the collateral victims of the Airbus-Boeing dispute. Over the next four months we’re now going to work to resolve it definitively. We don’t want wines and spirits once again to be the target of duties when the dispute doesn’t have anything to do with them.

Wine growing is one of our country’s most symbolic sectors; it’s one of the things which drives our foreign trade, and unfortunately there’s a strong temptation, when tensions rise, to target sectors which have particular economic and symbolic clout. This is why we remain fully mobilized alongside the sector, as we have been throughout this particularly tough period.

Straight away we’re going to continue strengthening the European instruments in order to defend ourselves from unfair or coercive practices and dissuade our partners from going down that road.

We’ll do our utmost to prevent wines and spirits being unfairly hit again.