Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Well, let's turn back
Speaker 1: to that interview now. After a tumultuous year for relations
Speaker 1: between the United States and Europe, are things starting to improve?
Speaker 1: The process to approve the Framework Trade agreementertain the US
Speaker 1: and EU agreed last summer is progressing through the European
Speaker 1: Parliament after being disrupted by President Trump's threats over Greenland?
Speaker 1: So what next for Transatlantic ties? Were joined by Andrew
Speaker 1: Posterer and ed, the US Ambassador to the European Union.
Speaker 1: Good morning, Great to have you with us. Thanks even
Speaker 1: great to be here in the studio. Before we get
Speaker 1: into the trade conversation, I just wanted to ask you
Speaker 1: about the story that is leading our agendas this morning
Speaker 1: about Iran and the potential for US military intervention there.
Speaker 1: I'm wondering what sort of conversations you're having with your
Speaker 1: European colleagues about that issue this morning. Are they concerned
Speaker 1: about what happens next in Iran?
Speaker 2: Really, everything I know about that issue I learned from
Speaker 2: Paul Wallace as I was getting ready to do a
Speaker 2: TV interview on Bloomberg this morning. You know, as president
Speaker 2: President Trump wants to be the peace president and has
Speaker 2: been the peace president across the globe in a number
Speaker 2: of conflicts. But he's also willing to strike the decisively
Speaker 2: if he feels America's interest or the interests.
Speaker 3: Of our allies are are at risk.
Speaker 2: So I don't have any inside information, and I really
Speaker 2: have not had conversations with any of the anybody.
Speaker 3: Nobody raises that.
Speaker 2: I was in an event last night to celebrate the
Speaker 2: birthday of the Japanese Emperor at the Japanese Mission. We
Speaker 2: saw a number of perm reps and.
Speaker 1: One of your best parties.
Speaker 3: Well it's a good one. They have great food. I'll
Speaker 3: tell you that.
Speaker 2: The Uh, it was great to see everybody, But nobody
Speaker 2: asked about Iran. That wasn't a topic. Then, you know,
Speaker 2: they you talk about the trade deal, you talk about
Speaker 2: critical minerals, you talk about regulatory reform, deregulation. Uh, but
Speaker 2: nobody really brought up Iran.
Speaker 4: Okay, So well, let's see what happens with the deadline
Speaker 4: that that President Trump has has given and what the
Speaker 4: reaction will be its trade deal. Let's talk about it.
Speaker 4: The European Parliament has added a number of conditions, including
Speaker 4: a time limit for the trade deal of twenty twenty
Speaker 4: eight and a suspension clause if the US imposes higher tariffs.
Speaker 4: Are you happy with those conditions?
Speaker 3: Well, the conditions came out of the committee.
Speaker 2: These they were not they have not been passed by
Speaker 2: Parliament yet that they come before Parliament on March ninth,
Speaker 2: when they're in plnary session in Strasbourg, which I intend
Speaker 2: to go to. I think it's important for the United
Speaker 2: States to let people know we think this is a
Speaker 2: big issue. We'll be there. Then it will go. Since
Speaker 2: the Council approved the trade deal as the Commission signed it.
Speaker 2: On the theory the deal is a deal, there'll be
Speaker 2: a trilog or in the United States what we'd call reconciliation.
Speaker 2: But there'll be a trilog here where the Council and
Speaker 2: the Parliament will discuss those amendments and we'll we'll have
Speaker 2: to see what comes out. I'd hate to compliment, I'd
Speaker 2: hate to make comment about any of them prematurely, and
Speaker 2: they really haven't been voted on by Parliament yet.
Speaker 1: I think I think, if you're going, do you plan
Speaker 1: to what do you plan to say to the members
Speaker 1: of the European Parliament at the planary session?
Speaker 2: But I plan to be there in case they have
Speaker 2: questions about what the United States position is on any
Speaker 2: of this and how important the trade deal is to us.
Speaker 2: I think that, you know, just my being there will
Speaker 2: I think, make a statement about how important the deal
Speaker 2: is to us. So I want to. I want to
Speaker 2: make that statement. There's also some I have friends in
Speaker 2: the Parliament now who i'd like to get together with
Speaker 2: to see how they're doing. And I have some individuals
Speaker 2: i'd like to meet with who I haven't met with
Speaker 2: yet in Parliament.
Speaker 3: So hopefully I'll do some of that.
Speaker 2: But on the Sunset provision, you know that one in
Speaker 2: particular seems a little strange to me. And we just
Speaker 2: spent Josh, they so long trying to get the European
Speaker 2: Union to approve the last deal that they agreed to.
Speaker 2: When was it in July, i think right, And the
Speaker 2: United States in August did everything we promised to do
Speaker 2: in the trade deal we executed. Now we've been waiting
Speaker 2: for nine months for Europe to do anything because it
Speaker 2: has to go through this process before it can act.
Speaker 2: And I hate to think that in a couple of
Speaker 2: years we're going to do all this again. Although President
Speaker 2: Trump might like it, he'd probably want to raise the
Speaker 2: tariffs once again, I don't know that he's I don't
Speaker 2: know that he's a big fan of lowering them to
Speaker 2: fifteen percent, but well he might be. I shouldn't comment
Speaker 2: on that. I'm only being half serious. That's probably a
Speaker 2: mistake on the radio.
Speaker 1: But one of the issues that the European Parliament Committee
Speaker 1: took issue with was the higher tariffs that are on
Speaker 1: steel altominium products as well. There's this question of a
Speaker 1: list of derivative products that use these metals as well,
Speaker 1: which has been a particular bone of contention for the EU.
Speaker 1: Are there changes of foot there, is there a hope
Speaker 1: for progress on those issues?
Speaker 3: Yeah, it is.
Speaker 2: The derivatives were a big issue even before anything arose
Speaker 2: about Greenland, So that was something that Burn Longe, who
Speaker 2: chairs the committee that approved the amended the amendments to
Speaker 2: the bill and the bill that's going before the Parliament
Speaker 2: on the ninth there, he's always been concerned about that
Speaker 2: and there I am told by people I know at
Speaker 2: the US Trade Representative's office in the Commerce Department that
Speaker 2: we have what we hope is a solution to some
Speaker 2: of those issues. We'll have to see whether it's in
Speaker 2: a solution that's acceptable to the EU. I would also
Speaker 2: mention though, that the EU's Carbon Border Adjustment Mechanism, which
Speaker 2: is another non barrier, non non tariff trade barrier, and
Speaker 2: those are mentioned extensively in the in the Framework Agreement,
Speaker 2: does basically the same thing. It puts a tax on
Speaker 2: US products that have you know, these these elements as well.
Speaker 2: It's the washing machines and motorcycles. The same things are
Speaker 2: covered by the derivative tax end by the Carbon Border
Speaker 2: Adjustment mechanism. So hopefully we'll be able to resolve both
Speaker 2: of those issues. But let's get let's get a vote
Speaker 2: out of Parliament, let's get a bill out of the
Speaker 2: trialog proceeding, and then I think we can go from there.
Speaker 4: In terms of the other major threads, there is this
Speaker 4: debate going on within the European Commission about the maide
Speaker 4: in Europe Plan, the rules on the preference of products
Speaker 4: made within the EU. You've talked about your concerns, they're
Speaker 4: already but you're worried about that particular issue and whether
Speaker 4: it will have a big impact on US companies if
Speaker 4: the Eupean Commission focuses on made in Europe rules, well.
Speaker 3: They made in Europe.
Speaker 2: Rules would be a direct contravention of the not only
Speaker 2: the terms, but the spirit of the framework trade agreement
Speaker 2: that was agreed to in Scotland, because we've agreed not
Speaker 2: to have those kinds of preferences between our two countries,
Speaker 2: and I think adopting them would would be a serious mistake.
Speaker 2: I would say, particularly in the area of defense, because
Speaker 2: we have a very intermixed defense industrial base between the
Speaker 2: United States and Europe. Many of the weapons, the armaments
Speaker 2: that we're using not only in NATO but also shipping
Speaker 2: to Ukraine, have production capacities in Europe as well as
Speaker 2: the United States, and the machines that make them. Some
Speaker 2: are made in the Czech Republic, in Finland, some are
Speaker 2: made in the US. There's a very intermixed supply chain,
Speaker 2: a defense industrial base, and a focus on having our
Speaker 2: defense products be interoperable. In other words, that if we
Speaker 2: are if we're a NATO member and we're producing military hardware,
Speaker 2: we want it to be we want to you know,
Speaker 2: we can't have it. You know, you working for different
Speaker 2: sized train rails or weights that are that don't work
Speaker 2: on European highways. We have to have these things interoperable,
Speaker 2: and these by europe preference, particularly in these defense procurement initiatives,
Speaker 2: is a real threat to our defense industrial base and
Speaker 2: that worries me a lot.
Speaker 1: Are you engaging with the European Commission on this? If
Speaker 1: you spoken to Commissioner Stefan Sorne.
Speaker 2: Yes, And we're engaging with the Parliament, We're engaging with
Speaker 2: members of Council. Actually, Matt Whitaker, who's the US ambassador
Speaker 2: to NATO, and I have an article coming out on
Speaker 2: this next week which will be in Political which is
Speaker 2: kind of a competitor viewers. But if you guys want
Speaker 2: to run our opts, I'll talk to you afterwards.
Speaker 1: But if you want to tell us what's in US
Speaker 1: would be uh would be useful for this because I
Speaker 1: think there's quite a lot of listening to you now,
Speaker 1: there'll be probably quite a lot of ambassadors and members
Speaker 1: of the European Commission would be quite concerned that perhaps this
Speaker 1: plan may upset the US trade relationship. Is this an
Speaker 1: issue that you could see becoming much bigger?
Speaker 3: I think we'll negotiate.
Speaker 2: I think we'll negotiate through this because I just don't
Speaker 2: I don't think it's a wise thing to do with
Speaker 2: particularly with respect to our defense industrial base, because the
Speaker 2: more you break that up, you know, it may it
Speaker 2: may help the economy of certain countries, but that's really
Speaker 2: not the purpose of the defense industrial base. That's really
Speaker 2: not the purpose of these funding mechanisms. If you want
Speaker 2: to have a funding mechanism to build up Europe's production capacity,
Speaker 2: you know, have a loan program that does that. If
Speaker 2: you're making a loan, If you have a loan program.
Speaker 2: The desire their designed to help Ukraine win the war
Speaker 2: in Ukraine, to defeat the Russians. Well, then they ought
Speaker 2: to be able to buy whatever they want from wherever
Speaker 2: they want, so that they can win the war. I mean,
Speaker 2: they've been Nobody thought they would last two weeks this said,
Speaker 2: we're going into our fourth year and they're uh, you know,
Speaker 2: they've changed warfare. Literally, they took out forty percent of
Speaker 2: the Russians. Multiply whoever thought this would all happen. So
Speaker 2: they should be able to purchase what they want. With
Speaker 2: respect to NATO, NATO member states should also be able
Speaker 2: to purchase what they want, what they need to meet
Speaker 2: their defense needs. So when the European Union comes up
Speaker 2: with these defense procurement initiatives, these funding mechanisms, these loan
Speaker 2: mechanisms to put in European preference language can be a
Speaker 2: very dangerous things because it weakens our joint defense efforts.
Speaker 4: Ambassador, the REALM Europe program aims to have more than
Speaker 4: fifty percent of weapons made in the EU. That that's
Speaker 4: the plan. And the question attached to that is because
Speaker 4: there are doubts in Europe about whether the US is
Speaker 4: a reliable partner for defense supplies.
Speaker 2: Well, I'll tell you the defense industrial base is filled
Speaker 2: with joint ventures and joint efforts by American and European manufacturers,
Speaker 2: also Japanese manufacturers, and this is we have a very
Speaker 2: integrated system here.
Speaker 3: And I think.
Speaker 2: That that approach to military spending, to defense spending ignores
Speaker 2: many things, including the was it eighty year eighty year
Speaker 2: old NATO alliance and the effectiveness of that alligned.
Speaker 1: Twice a lot in the past year. I think that
Speaker 1: has a lot of people questioning elements of the NATO alliance.
Speaker 1: Is it fair for them to question this element as well?
Speaker 3: Well? Not really.
Speaker 2: The United States is not withdrawing from NATO, and the
Speaker 2: President has made that clear and the Secretary of State
Speaker 2: has made that clear. You don't need the Ambassador to
Speaker 2: the EU to make that clear. Matt Whittaker says it.
Speaker 2: Our ambassador to NATO says it probably ten times a week.
Speaker 2: We are here. We have we have more troops here
Speaker 2: in Europe than all of the European militaries added together.
Speaker 2: You know, we've got our nuclear umbrella that protects Europe.
Speaker 2: That's not you know, it's not going anywhere, and if
Speaker 2: it did go somewhere, it's not something that Europe would
Speaker 2: be able to replace.
Speaker 1: So I think if Vanuel Macron would like to what's
Speaker 1: what's your view of that plan.
Speaker 3: Well, you'd sure have to make a whole lot more.
Speaker 2: He produce a whole lot more nuclear weapons than he
Speaker 2: has currently, and I don't know that France is in
Speaker 2: a particularly advantageous economic position to do that at the moment.
Speaker 1: I think France, your message to the U is, but
Speaker 1: you don't have to worry about the nuclear umbrella, that
Speaker 1: that's perfectly safe.
Speaker 2: You can't you can't match it, and and nobody's talking
Speaker 2: about taking it away. So let's let's focus on things
Speaker 2: that are actually important that we actually can do. Let's
Speaker 2: talk about strengthening NATO let's let's talk about building up
Speaker 2: the European economy, but do you regulation and having pro
Speaker 2: growth policies so that Europe can actually meet this five
Speaker 2: percent of GDP requirement that they've agreed to with NATO.
Speaker 2: Poland was out. I think it is either the Prime
Speaker 2: minister or the President of Poland was out just last
Speaker 2: week saying, look.
Speaker 3: We're at five percent.
Speaker 2: But the only way we've gotten here is we've got
Speaker 2: pretty good economic growth. So tax revenue is going up
Speaker 2: because we have growth. Well, the rest of Europe really.
Speaker 3: Doesn't have that growth.
Speaker 2: I mean, we're seeing GDP declines, We're seeing declines and
Speaker 2: standards of living, and we need to see those things
Speaker 2: re energize. We need to see reindustrialization, We need to
Speaker 2: see Europe participating in the AI economy. We need to
Speaker 2: see the kinds of growth that Europe talks about. Competitiveness,
Speaker 2: I'm not I wish they would stop talking about how
Speaker 2: they're going to compete with other people and just talk
Speaker 2: about how they're going to grow their economy. Europeans need,
Speaker 2: the European economy needs to grow. When it grows, it
Speaker 2: will be competitive.
Speaker 1: Yeah, and I think there's a lot of the ministers
Speaker 1: who would agree with you that the issues of competitiveness
Speaker 1: and growth are intertwined. But you know part of the
Speaker 1: plan and you talk about intus relation is the industrial
Speaker 1: accelerator acts that's going to have we're told by the
Speaker 1: debates going on, this's made in europe life. So is
Speaker 1: that they're going about it the wrong way? There are
Speaker 1: it is action being taken by the EU and all
Speaker 1: of these fronts.
Speaker 2: I think, I think the European Union has the right
Speaker 2: to put whatever language it wants in these agreements, whether
Speaker 2: it's to benefit Europe or to and they and they
Speaker 2: do need to do things that will benefit Europe because
Speaker 2: Europe needs to catch up on growth, it's falling increasingly behind. However,
Speaker 2: be careful when you do it, and be careful where
Speaker 2: you do it, because if you may cut out joint ventures,
Speaker 2: you may cut out opportunities to work together on technology
Speaker 2: or research that would actually be damaging to the European economy.
Speaker 2: This is why I say we need we need pro
Speaker 2: growth policies in Europe that are focused on increasing economic growth,
Speaker 2: and we need deregulation not simplification. It's not that the
Speaker 2: problem isn't that we've got a bunch of law regulations
Speaker 2: that are too complicated. Although you do have a bunch
Speaker 2: of regulations that are too complicated, the problem is you
Speaker 2: just have too many regulations period. And this isn't just
Speaker 2: me saying this as the ambassador from the United States,
Speaker 2: but Chancellor Merrit's has been very very vocal about this recently,
Speaker 2: as has Prime Minister Devember. They've been out saying, look,
Speaker 2: we've got too much regulation. We've become the champion of regulation,
Speaker 2: and that's been at the sacrifice of innovation and Europe.
Speaker 2: You know, we're within I don't know, five hundred miles
Speaker 2: of the greatest accomplishments in human history from from the
Speaker 2: perspective of innovation. That's that's not happening here because we
Speaker 2: have a lack of lack of people that are innovative.
Speaker 2: It's not happening here because they're being regulated off the continent,
Speaker 2: and it's something that needs to be addressed, I think
Speaker 2: very quickly.
Speaker 1: Okay, well, we thank you for bringing us your analysis
Speaker 1: of thought on your viewpoint this morning. The US and Bossters,
Speaker 1: the European Union. Andrew Poster, thank you very much for.
Speaker 3: My pleasure to both of you. Thank you