The European Parliament has frozen the ratification of a long-negotiated deal between the United States, and the European Union. This is in response to the President Donald Trump’s increasing threats to take over Greenland.
The European Parliament’s Trade Committee decided to delay the vote on ratification indefinitely. This decision casts doubts over the future of this agreement and highlights the seriousness of the current political crisis affecting transatlantic relations.
Trump had threatened to impose tariffs against several European nations if the United States was not allowed by the Danish government to purchase Greenland. Greenland is a Danish semi-autonomous region and member of the European Union.
Greenland dispute derails trade process
EU officials have described a Greenland-related escalation that has impacted the trade agreement reached last July with Washington.
Trump has promised to raise tariffs against multiple European nations, saying that it is essential to put economic pressure on them to negotiate the transfer of control over Puerto Rico to US.
In a press release, Bernd Lange said that the US undermines the predictability and stability of EU-US trading relations by threatening territorial integrity and sovereignty of an EU Member State and using tariffs to coerce.
Lange said that “we have no choice but to suspend the work” in relation to the deal.
This decision effectively stops the process of finalising the pact even though some parts have been implemented provisionally.
The details of the agreement that has stalled
Last summer’s trade agreement was intended to prevent a wider trade war between EU and US.
In exchange for the promise to remove all tariffs from US industrial products and certain agricultural products exported to Europe, it imposed a 15 percent tariff on goods imported by most EU countries.
The EU’s concessions at the time were seen as an attempt to stabilize economic relations with Washington. This was especially true as the EU sought to maintain US security assurances while Russia continued to wage war on Ukraine.
The agreement must still be approved by the European Parliament in order to become permanent.
The final step has been put on hold and a number of lawmakers openly question whether the ratification process should even proceed in these current conditions.
The European Backlash
Trump’s Greenland-Greenland ultimatum intensified the longstanding criticism in Europe that trade deals disproportionately favor the United States.
Some lawmakers, who had previously backed the agreement, now say that the Parliament can’t approve it as long as Washington uses tariffs to put pressure on an EU state regarding territorial sovereignty.
Trump said that a tariff of 10% on imports coming from eight European nations will be in effect starting on February 1, and it would rise to 25% on June 1 if negotiations do not lead to the purchase of Greenland, as he described the deal.
It was expected that the European Parliament would make a decision. The European Parliament’s decision was widely anticipated.
European leaders have now begun to prepare a wider response. On Thursday, the heads of state and government will meet in Brussels to discuss possible countermeasures should the US follow through with its tariff threat.
The EU is considering a range of options, including retaliatory duties on US products worth up to EUR93billion ($109billion) and the use of its so-called “anti-coercion” instrument.
This mechanism allows the EU to limit US firms’ access to its market, to curb foreign investments, to impose extra fees, or to impose trade barriers.
Ursula von der Leyen, President of the European Commission, spoke to EU legislators earlier in the day on Wednesday.
Von der Leyen stated that “Europe prefers dialog and solutions, but we’re fully prepared to take action, if needed, in unity and urgency, and with determination.”
As new developments unfold, this post EU freezes US trade deal in response to Trump’s Greenland threat may be updated.
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