“The agreement avoids continuing a tariff escalation between the United States and the European Union. International trade based on a relationship of trust and free trade must be the common will, and the predictability of the trade framework is essential for businesses.” These phrases are repeated in the three parliamentary responses published in recent hours by the Chamber of Deputies.

No need to worry, in short, after the trade agreement reached on 27 July in Scotland between US president Donald Trump and European Commission president Ursula von der Leyen and formalised on 21 August in a joint declaration. The agreement, aimed at redefining transatlantic trade relations--particularly in terms of customs duties and market access--provides for the introduction of customs duties capped at 15% on most European products exported to the United States, such as automobiles, medicines, semiconductors or timber.

MP Joëlle Welfring (déi Gréng) was concerned about its impact on Luxembourg’s agricultural sector. “Both parties have undertaken to work towards reducing non-tariff barriers in the agricultural sector… what is the specific situation?” she asked. While the question was addressed to agriculture minister Martine Hansen (CSV), it was foreign affairs and foreign trade minister Xavier Bettel (DP) who answered. He explained that “the agreement provides for improved access to the EU market, subject to tariff quotas, for non-sensitive products such as soya oil, crop seeds, cereals or nuts as well as certain processed foods (ketchup, cocoa, biscuits). Beef and poultry imports are not affected by the agreement.”

European agriculture “sacrificed”

Is this answer satisfactory to Chamber of Agriculture president Christian Hahn? “His answer is admittedly a little short, but that’s not his area of activity. It’s also true that this agreement is fairly global, so there aren’t many details about our sector. We’ll see what the real consequences are in the coming weeks or months. We have milk producers in particular who export to the United States, so we’ll have to analyse the impact this agreement will have had on them,” he told Paperjam.

“When you look at other deals like Mercosur, there are clearly disadvantages for meat production in Europe, for example, and it’s this one that I have more of a problem with. Having a deal is always better than not having one, and we clearly import more from the United States than we export in agricultural terms. But I don’t quite understand why we are still going to invest hundreds of billions of euros in the United States when we could be investing in European agriculture, which produces the food for our citizens,” adds Hahn. European companies are, in fact, expected to invest a further $600bn in sectors deemed strategic in the United States by 2028.

Farm Europe believes that “agriculture seems to be treated as a spare wheel and a bargaining chip, while the interests of certain sectors such as the automotive industry seem to have been the main concern of European negotiators.” For the Belgian Fédération unie de groupements d’éleveurs et d'agriculteurs (Fugea), “European agriculture is being sacrificed yet again… After ratifying the EU-Mercosur agreement, the commission is persisting in pitting our farms against production framed by inferior standards.”

“The best possible agreement” for the EU commission

On the French side, the president of the French employers’ organisation Medef, Patrick Martin, commented that “fundamentally, this is not--to say the least--the expression of a balanced balance of power between Europe and the United States. Some sectors are doing well, while others are under threat.” While the threat of across-the-board customs duties of 30% on all European exports has been avoided, a rate of 15% has been retained, compared with an average of 4.8% previously.

“This was the best possible agreement,” said the European Commission in a statement. It’s a sentiment shared by the Luxembourg government. In his three parliamentary responses, Bettel insists that “the members of the government will remain attentive to the concerns of all sectors impacted by the measures adopted by the United States and the European Union.”

In response to questions submitted by MPs Franz Fayot (LSAP) and Laurent Mosar (CSV), the minister for foreign affairs added that “the government welcomes the fact that an agreement has been reached. The impact on the European and Luxembourg economies remains to be assessed on the basis of concrete implementation. Strengthening the internal market and diversifying EU trade relations are priority measures to cushion the negative impact on our exporting companies.” On the consequences for the Luxembourg economy in general and the financial centre in particular, Bettel again replied that “stabilisation of the trading environment should mitigate the disruptive effects for the Luxembourg economy.”

This article was originally published in French.