The United States has asked the European Union to implement its trade deal with the US without amendments or risk losing “favourable” access to liquefied natural gas shipments from American exporters.
The Financial Times reported that US President Donald Trump’s ambassador to the bloc gave the warning on Monday.
The report noted that the EU’s ratification of last year’s agreement between the US President and European Commission President Ursula von der Leyen had been delayed by several issues, including Trump’s threats to invade Greenland.
What they are saying
The US ambassador to the EU, Andrew Puzder, said the energy aspect of the trade agreement, signed at Trump’s Turnberry golf resort in Scotland, was at risk if the bloc attempted to modify any of the other terms.
- “I don’t know what will happen with respect to energy if they don’t go forward with the agreement,” Puzder said. “If Turnberry isn’t implemented, I mean, we’re back to square one. I’m not sure where we go.
- “I think the United States will continue to want to do business with Europe, but the terms may not be as favourable. The environment certainly won’t be as favourable. And . . . there are other buyers out there,” he said.
More insights
The European Parliament is set to vote on Thursday on the pact, which includes an agreement for the EU to buy $750bn worth of US energy by 2028, including LNG, oil, and civil nuclear technologies.
- Any change to the EU’s energy agreement with the US would come at a time when global competition for LNG cargoes from suppliers outside the Gulf is intensifying.
- “Personally, I thought the Europeans should have committed to a trillion dollars’ worth of energy because it wasn’t just a promise that they would buy this energy; it was a commitment that we would sell them the energy,” Puzder added.
- “If EU member states are going to survive economically, they need energy, and we can supply it,” Puzder said. “We’d like to have the kind of relationship where we’re encouraged to do that.”
Puzder also said an EU rule requiring exporters to the bloc to declare methane emissions by January 1 should be amended because it would be impossible for most US producers to comply.
Puzder said he was “hopeful” that the rule would be changed because it “has the potential to drive up fuel costs, and Europe will realise it needs to reduce some of these trade barriers.”
What you should know
Nairametrics had reported that Qatar, which produces a fifth of the world’s LNG, had stopped exports after Iran blocked the Strait of Hormuz waterway.
- Strikes last week on Qatar’s vast Ras Laffan LNG complex have also worsened the situation and raised fears that global supply will remain tight for some time.
- It is not certain if the EU will be hit hard if the US, which boasts massive oil reserves, implements its threat against the bloc.
Although only about 10 per cent of the LNG that flowed through the Strait of Hormuz before the war is routed to Europe, the continent is vulnerable to global competition for supplies because of its dependence on gas imports. Some EU member states, such as Italy, sourced as much as a third of their LNG from Qatar.
