Italy Favors Trade Quotas Only in Broad Agreement With U.S.

(Bloomberg) -- Italy favors tolerating quotas on metal imports to the U.S. to avert a trans-Atlantic trade war only as part of a broader agreement involving other sectors too, outgoing Economic Development Minister Carlo Calenda said.

The European Union is considering the option should President Donald Trump impose restrictions on steel and aluminum shipments, according to EU officials in Brussels speaking on condition of anonymity.

“I am not in favor of tolerating quotas on metals unless this is part of a broader agreement,” Calenda said in a phone interview. “This would benefit both the EU and the U.S.”

“Instead of fighting over metals, we should take this opportunity to negotiate an agreement with the U.S. which is acceptable to public opinion, on tariffs and non-tariff barriers, eliminating all the controversial chapters of the Trans-Atlantic Trade and Investment Partnership,” Calenda said, mentioning the automotive, pharmaceutical and textile sectors in particular.

A condition for a deal would be that any U.S. limits on steel and aluminum from the 28-nation bloc be set at levels no lower than its 2017 shipments to the American market, the EU officials said. EU exports to the U.S. last year of both types of metal were worth a combined 6.4 billion euros ($7.6 billion).

The EU would still reserve its right to seek arbitration and possible retaliation within the rules of the World Trade Organization, but a moderate response could buy the bloc time until November, when the U.S. has mid-term elections that could change the political calculus in Washington, according to one of the officials.

©2018 Bloomberg L.P.

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