France holds out over start of EU trade talks with Trump

By Philip Blenkinsop

BUCHAREST (Reuters) - France expressed reservations on Friday about proposed trade negotiations with the United States, diplomats said, while other EU countries supported talks with Washington that could ward off punitive U.S. tariffs on European cars.

The European Commission has asked the EU's 28 countries to approve two negotiating mandates so that formal talks can begin, with many aware that U.S. President Donald Trump may hit EU car imports with duties if they wait too long.

Diplomats say Germany, whose exports of cars and parts to the United States are worth more than half the EU total, wants to press ahead. But France, with very few U.S. car exports, is reluctant to move before the European Parliament election in May, convinced that dealing with Trump is not a vote winner.

EU Trade Commissioner Cecilia Malmstrom said it made sense to wait for a vote in the European Parliament on the issue in March, but then move quickly -- a matter of weeks, not months.

"There were a few countries that needed to still have a little discussion internally, but while we are waiting for the European Parliament to vote, I think there are still two weeks to do that," she said.

French junior minister Jean-Baptiste Lemoyne earlier said that Friday's meeting in Bucharest of national ministers responsible for trade was merely the first political discussion, with more perhaps to come.

EU diplomats said France wanted to postpone a decision until after the European Parliament election in May, but was starting to understand that this would test Trump's patience too far.

They added that French President Emmanuel Macron and German Chancellor Angela Merkel would seek to resolve the impasse before or during an EU summit on March 21-22.

EU EYES CARS, U.S. WANTS FARM PRODUCTS

German Economy Minister Peter Altmaier said he was not aiming to "rush something through". His Austrian counterpart Margarete Schramboeck was more forthright.

"I expect from all the countries to give a mandate to the Commission... and not hold back because my car industry, maybe in France or one other country, is not as affected as much as in another country," she said.

The United States and Europe ended a stand-off of several months last July, when Trump agreed to hold off on car tariffs while the two sides looked to improve trade ties.

They committed, among other things, to work towards removing tariffs on "non-auto industrial goods".

The EU is looking now to start negotiations on tariff reductions, possibly including cars, as well as a separate set of talks on making it easier for companies to clear their products for sale on both sides of the Atlantic.

Industrial good tariffs are already low, at around 4 percent. However, the Commission has said that removing them would boost EU exports to the United States by 8 percent and U.S. exports to the European Union by 9 percent by 2033.

The United States has a wide-ranging wish list, including comprehensive agricultural market access. EU unwillingness to include farm products could set it on a collision course with Washington.

($1 = 0.8828 euros)

(Reporting by Philip Blenkinsop; additional reporting by Foo Yun Chee in Brussels; Editing by Toby Chopra)