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Economics
Monday, July 23, 2018
How should the EU react to US tariff threats? Not with counter-rates, asks the Ifo Institute of Munich. Europeans should instead take at the word the US Treasury Secretary Mnuchin and work for a new G7 free trade zone
The Ifo Institute of Munich called on Europeans to accept the US offer of negotiations on a free trade area of the main industrialized countries. Trade expert Ifo Gabriel Felbermayr said: "European leaders Juncker and Tusk should forget the insults of recent days when meeting Wednesday with US President Trump and propose the opening of serious negotiations."
Felbermayr refers to the remarks made by US Treasury Secretary Steven Mnuchin and attended the G20 meeting in Buenos Aires, Argentina, a free trade agreement. exchange between the G-7 countries – the United States, Canada, Japan, France, Germany, Italy and Britain -. "It's an offer that the EU must absolutely take it, "said Felbermayr." You can not flog American protectionism with counter-duties to save global free trade, and refuse such an initiative. "
The expert recommended the early start of the exploratory talks. "They should not depend on the abandonment of US steel rights and the Aluminum, as demanded by France. "But there are still ambiguities in the US supply. Thus, Mnuchin speaks of the dismantling of subsidies and "other trade barriers", which is not entirely clear, which is exactly meant with the latter.
The economic justification for such a free trade agreement, however, considers Felbermayr very convincing. Instead of embarking on a detrimental trade war, it could cause positive long-term growth effects in the US and the EU of around 2%, he said.
Source: n-tv.de
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