Friday 21 August 2020 - the USA and the European Union agreed to a reduction in tariffs on some European products. Hence providing relief to export goods as a way to boost the EU-US trade relations.
Phil Hogan, the European commissioner for Trade and Robert Lighthizer, the United States Trade Representative promised of a “mutually beneficial agreement” that is expected to cultivate positive relationship for the two economies. The EU and USA clearly need each other in these current times and politicians are acting on this.
The imposed reductions will be effective from August 2020 for the next five years under the status of the Most Favored Nation (MFN) of the World Trade Organization (WTO). The introduction of this new trade relationship is expected to “mark the beginning of a process that will lead to additional agreements” that are expected to “create a more free, fair and reciprocal transatlantic trade.” It is assured that this agreement will create momentum for more comprehensive free trade agreement in the future.
In the past, the E.U. and the USA have had strict trade relationships that negatively impacted both their economies. However, amidst the pandemic, the most feasible act to boost economic growth and development is internationalization.
The two governments have slowly responded to the economic downturn by easing tariffs on a few goods and hoping to create long-lasting trade relationships. Because the two parties are among the most important trading partners, there is a need for a continuous united front that can potentially lead to real progress and force other economies to change their trade practices in the near future.
This small but symbolic step asserts the roles the E.U. and U.S. play as trade partners. For several companies, it will be seen as an essential change of trend after two decades of restricted trade.
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