Talks with the US are a “major opening” to avoid a trade war, says Le Maire


by Michael Rose

WASHINGTON (Reuters) – Talks between French President Emmanuel Macron and his U.S. counterpart Joe Biden have resulted in a “major opening” to avoid a “subsidy race” on both sides of the Atlantic, a French Economy Minister Bruno Le Maire said on Friday.

Emmanuel Macron used his state visit to Washington this week to push the United States to find ways to mitigate the impact of the Inflation Reduction Act (IRA) and its tax credits and relief measures. subsidies, which Europeans fear will derail their own industrial recovery.

“I really think that there will be a before and after the President’s state visit to Washington,” Bruno Le Maire told Reuters and the Financial Times.

“Because there has been a real awareness (of the subject, editor’s note), recognition by the American administration, but also by Congress,” added the minister in Washington.

After an interview at the White House with Emmanuel Macron, Joe Biden assured Thursday that the laws encouraging the production in the United States of semiconductors or renewable energies by heavy subsidies were not intended to harm the Europeans and could be changed so that they can do their part.

“There are adjustments we can make,” Joe Biden said, without detailing what those changes might be, as legislative options are limited.

“For example, there is a provision that says there is an exception for anyone who has a free trade agreement with us,” added the American president.

On the move Friday in New Orleans, Louisiana, Emmanuel Macron was pleased to have broached the subject with Joe Biden.

“Before I put my foot in the dish, it was not a debate at all at home and it was not a debate at all here,” Emmanuel Macron told the press, saying he hoped the subject would be settled. in the first quarter of 2023.

“My duty was to tell the truth,” he added.

Bruno Le Maire believes that the fact that Joe Biden suggested that the allies could be treated as countries having concluded a trade agreement, such as Canada and Mexico, constituted a “major opening” resulting from intense discussions between French officials and Americans.

“IMPORTANT POLITICAL CHOICE”

“It’s a major opening to say: they are allies, they are friends,” said Bruno Le Maire. “So even if we don’t have a trade agreement with Europe, we could consider European components as coming from a country under a trade agreement.”

“It’s not an adjustment, it’s an important political choice,” added the French minister.

The French teams believe that technical work will continue in the days and weeks to come to see how to translate this openness into regulations, but they believe that the implementing decrees of the Biden administration could be the vehicle for these “adjustments”. “.

“SWEEP IN FRONT OF OUR DOOR”

In Washington, Emmanuel Macron, Bruno Le Maire and other French officials have launched a veritable lobbying offensive with American officials on all sides. And the French president warned US parliamentarians in a closed-door meeting that the IRA was “super aggressive” for European companies.

Asked if Emmanuel Macron had brandished the threat of recourse to the World Trade Organization, Bruno Le Maire replied that he did not have to do so and that the Biden administration was very eager to work with their European allies, especially since China was a rival for both sides of the Atlantic.

“Nobody wants a trade war with the situation we are in,” said Bruno Le Maire.

“We have a competitor called China. The strategic objective of the United States, it seems to me, is not to weaken Europe, but on the contrary to work in partnership with Europe”, has said the minister again.

Bruno Le Maire indicated that he was working in coordination with his German counterpart, Robert Habeck.

German automakers are among the biggest potential victims of the IRA, which provides massive subsidies for US-made electric cars.

French equipment manufacturers like Valeo, which equip German manufacturers, should also suffer.

But for Bruno Le Maire, even if the impact of the IRA can now be mitigated, the current period shows that Europe is too slow to encourage investment in the technologies of the future, with mechanisms that can take two years to implement. grants, whereas US tax credits are instantaneous.

“It is up to us, Europeans, to sweep in front of our door”, insists Bruno Le Maire.

(Report Michel Rose, French version Matthieu Protard)



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