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AmCham Sweden is the voice of American business in Sweden. We are champions of US - Swedish trade and investment and US commercial interests in Sweden and give members a networking platform, critical business information, and an amplified voice.

News

U.S. Chamber European Affairs Update

Jacob Dornbos

 
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EUROPEAN COMMISSION CONSULTATIONS
AND REQUESTS FOR COMMENT

A full list of all open Commission consultations is available here.

 Selected Consultations:

  • DG ENERGY – Consultation on the list of Candidate Projects of Common Interest in Electricity Infrastructure – Deadline for comments: February 28, 2019

  • DG TAXUD – Evaluation of Administrative Cooperation in Direct Taxation – Deadline for comments: March 4, 2019

  • DG TRANSPORT – Decision Setting the Union-wide Performance Targets for the Third Reference Period 2020-2024 – Deadline for comments: March 25, 2019

  • DG JUST – Evaluation of the Consumer Credit Directive – Deadline for comments: April 8, 2019

 

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NEWS

U.S. – EU Trade

U.S. Administration Weighing Auto Tariffs
The U.S. Department of Commerce issued its report to the White House on the national security implications of imported autos and auto parts. The report has not yet been made public. The Chamber released a blog post on the topic earlier this week, highlighting the firm opposition to such tariffs across the domestic automobile industry—a major innovation and investment success story—which employs nearly 8 million workers.

The European Perspective
The European Parliament’s International Trade Committee gave conditional approval to launch talks to eliminate industrial tariffs and move forward with regulatory cooperation efforts, though only by a very slight 21-17 margin. The entire Parliament is due to consider the motion in early March.

Last Friday, EU trade ministers decided to wait before voting on the Commission’s draft negotiating mandates until the Parliament reaches its final conclusion. EU heads of state could give the Commission the final go-ahead at the next meeting of the European Council on March 21.

Brussels and Washington remain at odds on whether to include agriculture in the talks. And of course, uncertainty over the contents of the auto 232 report rattles nerves across Europe. In a related development, last week’s EU trade ministers’ meeting focused on potential EU retaliation on approximately $20 billion in U.S. exports if Europe is hit by the auto tariffs.  Some countries, notably France, remain hesitant to negotiate while steel and aluminum tariffs remain in place. Others, like Germany and the Netherlands, are very eager to see tangible results.

President Trump Voices his Displeasure at EU Trade Surplus
The European Union reported a record goods trade surplus with the U.S. in 2018. President Trump recently spoke out against the EU’s trade surplus, including telling a meeting of governors that the EU needed to “play ball” in trade talks, or else the U.S. will “tariff the hell out of them,” claiming that the EU is “tougher than China.”

New EU Website Underlines Importance of Transatlantic Trade
This week, the EU Delegation to the U.S. unveiled a new report and website to underline that the U.S. goods trade deficit with the EU is merely one facet of our relationship. The EU is our largest foreign investor, nearly 7 million U.S. jobs are directly created either by EU investment or trade with Europe, and once you factor in foreign affiliate income and trade in services, the U.S. actually has a surplus with the EU. The website also underlines the strength of our relationship on a state-by-state basis.

Nord Stream 2

European Commission to Gain Regulatory Oversight of Pipeline
EU member states overcame their differences to back a plan to regulate Russia’s Nord Stream 2 pipeline. The decision will not rule out its construction, but is likely to slow its progress. The plan calls for all pipelines to meet EU energy market rules by: not being directly owned by gas suppliers; applying non-discriminatory tariffs; enforcing transparent reporting requirements; and allowing at least 10 percent of capacity to be made available to third parties. This political compromise was the culmination of debates between a series of competing views from various stakeholders impacted by the proposed pipeline.

U.S. Senate Resolution
In a sign of how controversial Nord Stream 2 is in Washington, last month Senator Ron Johnson (R-WI) introduced a resolution in opposition to the completion of the pipeline, calling instead for the EU to promote energy policies that lessen its dependence on Russian energy. The Resolution cites Russia’s illegal annexation of Crimea, and the precedent of Russia using its gas pipelines as a geopolitical tool against U.S. allies in Europe. 

U.S. Delegations in Europe

Munich Security Conference
Tensions ran high last weekend in Munich amidst a clear rift between the United States and its European allies. U.S. Vice President Mike Pence delivered a speech challenging Europe to support the United States in its foreign policy priorities, including Iran Sanctions (a non-starter) and NATO spending (well underway, but not fast enough according to the Administration). German Chancellor Angela Merkel forcefully responded to Pence’s address with a strong defense of multilateralism to rapturous applause and warned against the Trump Administration’s tactics of isolationism and threats against its allies.

Congress seeks to reassure Brussels
House Speaker Nancy Pelosi and a large delegation of U.S. lawmakers visited Brussels following the Munich Security Conference. Pelosi sought to demonstrate Congress’ desire to preserve strong ties with America’s important European allies.

Secretary of State in Central and Eastern Europe
Mike Pompeo, the U.S. Secretary of State was on an official state visit in Europe last week to celebrate thirty years since the fall of the Berlin Wall and reinforce partnerships between the U.S. and Central Europe.

Latest on Huawei and Europe’s 5G Networks
The German government is leaning towards allowing Huawei to construct its 5G infrastructure despite Washington’s attempts to lobby its allies against working with the Chinese firm. A recent probe by Germany’s cybersecurity agency failed to demonstrate that Huawei could use its equipment to clandestinely siphon off data and did not uncover any indication of wrongdoing by the Chinese company.

Instead of outright bans, European countries are likely to pursue a “third way” option, where additional network security measures are introduced, alongside a willingness to work with Huawei.

The United Kingdom is also grappling with the same questions regarding Huawei and 5G. Many senior government officials note that the UK has successfully managed the risks from Huawei’s presence in the British market for more than 15 years through exceptionally strict security reviews.

Last December, the Czech Republic’s cyber security watchdog, NUKIB warned about the dangers in using Chinese companies ZTE and Huawei to build the country’s 5G infrastructure. This lead to a host of private and government-sponsored risk analyses. Huawei has repeatedly denied the claims, and now has claimed they are prepared to bring their case to the national courts.

Tech Policy Update

Twitter implements political ad restrictions
Twitter is set to introduce new restrictions on its political ad rules ahead of European Parliament elections in late May. The new rules will seek to stop non-EU entities engaging in political advertising on the platform in a move to prevent foreign interference. Twitter will also make details about the origins of ads publicly available in an effort to promote transparency on the platform.

Digitizing Europe Summit
The “Digitizing Europe” Summit, under the theme 'The Future of Made in Europe' took place last week in Berlin. In a keynote address, German Chancellor Angela Merkel promoted a rapid but realistic expansion of  new digital and telecommunications infrastructure. The event brought together several high-ranking European politicians and business executives to debate how to promote a prosperous digital future for Europe. 

Digital Services Tax
European Governments and the OECD are doubling down on their efforts to develop and implement digital service taxes on some of the continent’s largest tech companies in the countries where their users and customers live. “A change of balance” is on the horizon, declared Pascal Saint-Amans, the senior tax official at the OECD.

The OECD and the UK Government are both conducting open stakeholder consultations on how any new digital services taxes should be defined and developed. The U.S. Chamber will respond to both of these consultations.

Exports on the Increase Yet Worries Loom Warns Minister

Caroline Probst

The value of Swedish export increased more than 10% in 2018 compared to the year before, writes DN. In particular oil products, cars and paper had the biggest increases over the year. Minister for Foreign Trade Ann Linde (S) is happy about the numbers but expresses worry over the impact Brexit, a US-China trade war and American tariffs on automobiles may have on Swedish exports. A 25% tariff rate on cars could lead to the loss of 3000 to 4000 jobs according to a government report. At the same time the UK is one of Sweden’s most important trading partners. Despite the the insecurity in global politics, Linde still hopes Swedish exports can continue to grow and points out how export-dependent Sweden is.

Source: Mundus Weekly

U.S. Chamber European Affairs Update

Vivian Davis

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In the last few days, the Commission controversially rejected the proposed merger of Siemens and Alstom—and Paris and Berlin have already vowed to try and change Europe’s competition rules to encourage European champions in the future.

The Commission released a status report on the U.S.-EU trade talks, noting that while some progress has been made—the shadow of possible 232 tariffs on autos looms large. Services have been notably left out of the discussions to date. The Council is due to consider the EU’s draft negotiating mandates for the first time on February 22. For its part, the European Parliament is considering a motion that would call on the Council to reject even starting negotiations while the steel and aluminum tariffs remain.


EUROPEAN COMMISSION CONSULTATIONS AND REQUESTS FOR COMMENT

A full list of all open Commission consultations is available here.

Selected Consultations:

  • DG CLIMA – Revising the Rules for Free Allocation in the EU Emissions Trading System – Deadline for comments: February 22, 2019

  • DG ENERGY – Consultation on the list of Candidate Projects of Common Interest in Electricity Infrastructure – Deadline for comments: February 28, 2019

  • DG TAXUD – Evaluation of Administrative Cooperation in Direct Taxation – Deadline for comments: March 4, 2019

  • DG JUST – Evaluation of the Consumer Credit Directive – Deadline for comments: April 8, 2019

NEWS

U.S.-EU Trade & Cooperation on China

European Commission releases Transatlantic Trade Progress Report
The European Commission published a report on the progress of the trade talks with the U.S. initiated after last July’s meeting between presidents Juncker and Trump. Europe is focused on removing tariffs on industrial goods, and on delivering results from regulatory cooperation and conformity assessments. The EU is also seeking to facilitate increased imports of soybeans and LNG from the U.S.

The report identifies pathways to progress on regulation of pharmaceuticals and medical devices, and prioritizes cybersecurity cooperation. Finally, it notes existing Section 232 tariffs on aluminum and steel, and reiterates that imposition of similar tariffs on autos would halt the talks immediately. The full report is here.

European Parliament Considers Motion to Disapprove U.S. Trade Talks
The Parliament’s International Trade Committee is considering a motion to request the Council of the EU to reject the recently-issued negotiating mandates that would give the Commission the green light to formally commence trade negotiations with the U.S. Some MEPs reject the premise of negotiating while the Section 232 tariffs on steel and aluminum products are in place. Commission officials, however, insist that a better approach is refusing to conclude a new trade agreement until those tariffs are removed. The Council is due to consider the mandates at a meeting on February 22.

U.S. Ambassador urges EU to Join Forces against China
U.S. Ambassador to the EU Gordon Sondland called on the U.S. and EU to overcome their current trade tensions and join forces to push back on shared challenges vis-à-vis China’s trade practices and industrial policies.

State Department Urges European Allies to block Chinese Companies
Washington is calling on its European allies to block Chinese companies Huawei and ZTE when building their next-generation telecommunications networks, citing Beijing’s unchecked ability to access sensitive data from these companies and the attendant threats to national security. Some German officials doubt the credibility of the U.S.’s pleas, citing past U.S. intelligence hacking of German officials.

Environmentalists, allies urge Trump against Uranium tariffs
After two American mining companies requested tariffs on the import of uranium, environmentalists and U.S. allies have expressed formal opposition to the duties. If implemented, these tariffs would raise fuel prices and could force several of the U.S.’s 98 nuclear power plants to cease operations. The EU has spoken out against these potential tariffs, objecting to the potential use yet again of Section 232 authority. The U.S. Chamber opposes such measures, since they would present unnecessary challenges to the nuclear power sector, and undermine U.S. energy security.

Commission Approves U.S. Soybeans as Biofuels
The European Commission recently approved U.S. soybeans as a source of biofuel. The decision means American soy crops comply with the sustainability criteria under the EU's Renewable Energy Directive and can therefore be used for producing subsidized biofuels in the EU. "The United States is Europe's main soya beans supplier and today's decision will further expand its market opportunities in Europe," the Commission said in a statement. The recognition is valid until July 2021, when new—and yet to be defined—EU rules for renewable energies start to apply.

Siemens-Alstom Merger Fallout & EU Competition Policy

Commission Vetoes Siemens-Alstom tie-up
European Competition Commissioner Margrethe Vestager announced the Commission’s veto of the proposed merger between Europe’s two leading train manufacturers. Paris and Berlin were strongly pushing for an “Airbus for the railways” in the face of growing competition from China’s state-owned CRRC, which is approximately 3x the size of Siemens and Alstom combined. Commission President Jean-Claude Juncker defended Vestager’s decision, citing the importance of ensuring a level-playing field in Europe over playing politics. The EU determined that Europe’s rail users have more to fear from a dominant Siemens-Alstom than a “big bad Chinese wolf.”

European Digital Tax Efforts

France’s Digital Services Tax
The French government is working to implement a domestic tax on two types of digital services. The draft legislation covers tech companies that connect users with each other to offer a service, such as booking a room on Airbnb, and platforms that sell space online for targeted ads such as Facebook and Google. Economy minister Bruno LeMaire had previously indicated that companies that report over 25 million Euro in revenues in France and 750 million Euros worldwide would be subject to the new tax, whose final rate and implementation date remain unclear.

OECD eyes long-term solutions to digital tax questions
Countries and jurisdictions participating in the OECD/G20 Inclusive Framework for Base Erosion and Profit Shifting (BEPS) have ramped up efforts towards reaching a solution over the question of how to most effectively tax multinational corporations as the economy rapidly digitalizes. The group released a position paper addressing key areas where consideration or reforms are necessary.

U.S. Senate Finance Committee opposes unilateral tax decisions
Leaders from the Finance Committee wrote to Secretary Mnuchin last week, condemning unilateral European digital tax measures, not least given their unfair focus on American companies. Senators Grassley and Wyden urged Treasury to play a more active role in ongoing OECD talks. Senator Grassley also spoke forcefully against these unilateral actions during a floor speech last week.

COUNTRY SPOTLIGHT

Germany
Germany’s competition authority has ordered Facebook to change its data collection procedures. The regulator said Thursday that Facebook’s data practices across its suite of apps constitute an “abuse” of its market power. The company must first obtain consent from users before combining their data. Facebook plans to appeal the decision.

Norway
25 years after Norway entered the Single Market by joining the European Economic Area, EU skepticism is on the rise. Opponents are beginning to question the impact the deal has had on wages, labor laws, and national sovereignty and self-determination. The deal largely makes Norway a “rule-taker” at the hands of the EU. While Norway has full access to the inner market, it also must accept the free movement of workers and adopt new EU laws, without having a full say in the debate.

North Macedonia
NATO members signed an agreement with the Republic of North Macedonia on Wednesday that will make it the alliance’s 30th member. NATO Secretary-General Jens Stoltenberg underlined that North Macedonia’s involvement will bring increased stability to the Western Balkans. Each of the 29 NATO members must now vote to ratify North Macedonia’s ascension to the alliance.

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