On September 8, 2020, the European Commission (“Commission”) published a proposal for a Council and European Parliament regulation to eliminate duties on certain products imported to the European Union (full text accessible here). In return, the United States will reduce its duties on certain EU exports to the U.S. market. This will put into effect the agreement announced by the European Union and the United States on August 21, 2020 (full text accessible here). These tariff reductions between the European Union and the United States will increase access to both EU and U.S. markets by around €200 million per year. The Commission sees this initiative as a first step to de-escalate bilateral trade tensions and support the settlement of ongoing disputes.
According to the proposal, elimination of customs duties for the relevant products shall be subject to the reduction by the United States on an erga omnes basis of certain tariff lines listed in Section II of the Annex to the proposed regulation and to the United States abstaining from introducing new measures against the European Union that undermine the objectives pursued by the Joint Statement of August 21, 2020.
Once approved, in line with the relevant European and U.S. procedures, the agreement will entail the reduction of U.S. tariffs on European exports worth some $160 million a year. This includes prepared meals, crystal glassware, surface preparations, propellant powders, lighters, and lighter parts. For its part, the European Union will eliminate tariffs on imports of U.S. live and frozen lobster products; U.S. exports of these products to the European Union are worth some $111 million.
Both sides will eliminate those tariffs on a most-favored nation basis, i.e., for any partner, in line with existing multilateral commitments. The measures will apply with retroactive effect as of August 1, 2020.