Fears Grow of US-EU Trade Spat
ASHER: All right. I want to take you back to the streets of Hamburg now. You're seeing -- basically, this is a shaky video, what we're seeing. But you're seeing people milling around. It doesn't seem to be as robust in terms of protests, what we saw yesterday. But there is, if you look closely, towards the back of the screen, you can see an object that appears to be on fire. These anti-capitalist protests happen at every single G20 summit, although these protests do seem to have had a little bit more rigor, a little bit more fervor than what we're used to. It is taking place in Hamburg -- in the City of Hamburg. Normally, they take place in more remote areas, but this one taking in the City of Hamburg. And that means that police certainly do have a challenge. I want to list some of the protest numbers for you -- 160 police injured so far, we know that 70 arrests and 15 people so far have been detained. We will continue to keep an eye on what's happening in the City of Hamburg where it's gone roughly 10:30 at night. Again, these protests seem to be calmer than what we saw yesterday. There are people milling around. Where Atika Shubert was reporting on about half an hour ago, there did seem to be a lot more calm in terms of very much sort of a party atmosphere. Where we are now -- where we're looking at now, there does seem to be a much more tense atmosphere, but we will keep an eye on these protests and have much more a little bit later on in the show. And also brewing in Hamburg, there are fears of a trans-Atlantic trade war. The European Union is in a mood of elevated battle, according to the commission president Jean-Claude Juncker. He said it will retaliate within days if the US introduces new tariffs or quotas on foreign steel. In a possible game of tit-for-tat, "The Financial Times" quotes unnamed European officials were drawing up a list of US goods to target in response. They reportedly include bourbon whiskey, orange juice and dairy products as well. Speaking at the G20, Mr. Juncker said the EU is prepared for any outcome. Take a look.</s>JEAN-CLAUDE JUNCKER, PRESIDENT OF THE EUROPEAN COMMISSION (via translator): We've already heard that some are considering protectionist measures against national imports in the near future. Should this happen, the European Union will know how to react sufficiently.</s>ASHER: All right. Jacob Kirkegaard is a senior fellow at the Peterson Institute for International Economics. He joins us live now from Washington. So, Jacob, thank you so much for being with us. So, now that the EU and Japan have penned a trade deal and there's still no sign of an EU-US version, what does that mean for opportunities for American companies, do you think?</s>JACOB KIRKEGAARD, SENIOR FELLOW, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: Well, I mean, it certainly means that they will face a lot more competition in both the European and Japanese markets, which if you are especially American agricultural producers is bad news because not only will this sector have lost out from potential new gains with the withdrawal from the TPP, but they will certainly potentially lose very significant market share in Japan just as American industrial firms will face renewed Japanese competition in Europe. So, it's all around bad news.</s>ASHER: So, in your mind, do you believe that the UK has a better chance of getting a free trade deal with the United States as opposed to the EU?</s>KIRKEGAARD: It's possible. But I don't think such a free trade agreement bilaterally between the UK and the US will be necessarily in the UK's economic interest because I think they will find it very, very difficult to negotiate with an America first administration. They will be clearly forced to give very large concessions on agriculture, public procurement, which would mean the National Health Service and those kinds of sectors, which I think will be very politically difficult for Theresa May to deliver. So, as appealing as such a deal might seem in the short run, when you get down to the nitty-gritty of the economic relationship, I think there's very little to be gained there frankly for the</s>UK. ASHER: OK. So then, what about for the EU? If the EU was going to get a trade deal with the United States, I'm assuming it's the same thing where the America first policy would force the EU to sort of bend to certain demands. What would the EU have to do or agree to to get the US on board with the free trade deal?</s>KIRKEGAARD: Well, I mean, if we believe where the TTIP negotiations were left out, I mean, basically, we know what some of the US demands are, they are in agriculture, especially they are on issues of data privacy and vice versa. The EU has issues related to public procurement. But I think with regards to TTIP, the really big issue in that trade agreement wasn't so much about trade, it was about the coming together of the EU and the US and having joint -- mutual industrial standards that would then go on to become global standards. So, it's really more an agreement about setting global standards to compel everybody to follow them rather than to liberalize trade further between the two because, quite frankly, trade barriers between Europe and the United States are already quite low.</s>ASHER: So, just in terms of overall -- as Donald Trump moves towards much more protectionist, much more isolationist policy, you are seeing other world leaders do the exact opposite -- move towards much more global economic deals. From your perspective, the long-term ramifications of that in five, ten years from now are what?</s>KIRKEGAARD: Well, I mean, it depends, I think, a lot on whether or not the United States continues down this path. I mean, a lot could change in 2020 for sure. But if the United States continues on this path, what we are witnessing is essentially a sort of 19 to 1 G20 Summit that signals that the US is isolated, but crucially and very importantly that the rest of the world continues as if the US didn't really matter. It's business as usual. They continue with liberalizing and integrating. And if the US wants to step aside, well, it can do so, but it cannot change the functioning of the system that it itself backed -- historically helped underpin, which really has very far-reaching implications for this idea of US sovereignty because not even the United States today is big or strong enough to, on its own, change the working of the global economic system.</s>ASHER: Right. So, if the US has its own protectionist policies, that's fine, but the rest of the world is basically going to go full steam ahead. Jacob Kirkegaard, we have to leave it there. Thank you so much. Appreciate that. All right, still to come here on QUEST MEANS BUSINESS, what was supposed to be a sideline, half an our meeting turned into more than two hours. Two hours of talk between two of the world's most powerful men. What on earth -- what on earth did they talk about? We'll go back to Hamburg. Next.