Angela Merkel defies Trump, defends free trade at EU-Asia meeting

German Chancellor Angela Merkel has rebuked the "America First" approach to free trade of US President Donald Trump. Meeting in Brussels, European and Asian leaders have pledged to create "win-win" situations.

German Chancellor Angela Merkel defended free trade at a summit of European and Asian leaders in Brussels on Friday, rejecting the protectionist rhetoric and policy of US President Donald Trump.

"We can show that it's about creating win-win situations, making it clear that when one profits, the other also profits," she said at the 12th summit of the Asia-Europe Meeting (ASEM).

Read more: Angela Merkel and Donald Trump stress unity amid differences

Merkel's call set the tone of the two-day meeting, where 30 European leaders and their counterparts from 21 Asian countries are expected to defend the World Trade Organization (WTO), international cooperation, and the fight against climate change.

"The summit shows that countries from Europe and Asia, which all want a rule-based world trade, are gathering here to commit themselves to multilateralism and this is an important signal," Merkel said.

EU-US trade relationship

More than a trillion euros in trade

The European Union is the US' largest export market, accounting for about one-fifth of all US exports. Similarly, one-fifth of EU exports go to the United States. EU-US trade in goods and services was €1,069.3 billion in 2017. The EU imported €256.2 billion in goods from the US, and exported €375.8 billion.

EU-US trade relationship

EU trade surplus

The main exports and imports between the EU and US fall into the categories of machinery and vehicles, chemicals and other manufactured goods. Combined, they accounted for 89 percent of EU exports and imports with the US in 2017. In all three categories, as well as food and drink, the EU had a trade surplus. The US had a trade surplus in raw materials and energy.

EU-US trade relationship

Cars, machinery top exports

At €167 billion, machinery and vehicles were the largest EU export category to the US, accounting for 44.4 percent of goods exports. The €111.5 billion in machinery and transport equipment was the largest EU import from the US, accounting for 43.6 percent of imports.

EU-US trade relationship

Small part of trade pie

At the end of May 2018, the Trump administration imposed a 25 percent tariff on EU steel and 10 percent tariff on aluminum. Steel and aluminum exports to the United States were worth €3.58 billion in 2017.

EU-US trade relationship

Retaliatory tariffs

In response, the European Union developed a list of products it may subject to retaliatory tariffs. These include typical American products like peanut butter, bourbon whiskey, Harley Davidson motorcycles, jeans and orange juice. The exports targeted by the EU are worth about €2.8 billion annually, according to EU officials.

EU-US trade relationship

Services include travel, education

For services, the EU imports amounted to €219.3 billion and exports €218 billion. The top services were in professional and management services, intellectual property, travel and education. About a third of EU-US trade consists of intra-company transfers.

Trump's specter and a deal with Singapore

The German chancellor's comments directly contradicted Trump's zero-sum approach to trade and disregard for multilateralism.

Under the banner of "America First," the US president has called for ripping up free trade deals, protected domestic industries through tariffs, and lambasted Germany and the European Union for their high export surpluses with the US.

Fighting back against that doctrine, the EU and Singapore signed a free trade deal later on Friday on the sidelines of the summit.

The agreement had been in the works for eight years, but progress stalled amid growing protests against other trade accords like the one struck with Canada and one planned with the US.

The new trade deal will need to be approved by the European Parliament and the national parliaments of the EU's 28 member states before it can take effect. 

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Divisions below the surface

Disagreements nevertheless emerged between Europe and China on Friday, with China refusing to admit wording in a final communique that would have called for the end of state subsidies, according to Reuters news agency.

Austrian Chancellor Sebastian Kurz told reporters that when it comes to China's trade practices, Europe expects trade rules to be upheld.

"When we find protectionism, we reject it. Free trade must always be fair, equitable and based on rules. That goes in both directions," Kurz said.

The EU and the United States have criticized China for distorting international trade by subsidizing national companies and promoting oversupply in international steel and aluminum markets.

European leaders also face challenges in maintaining good trading relations with Asian countries that have poor human rights records. Electoral irregularities in Cambodia and the Rohingya humanitarian crisis in Myanmar have led the bloc to recently threaten to revoke both countries' trading privileges.

Merkel acknowledged those difficulties in her speech on Friday, admitting that European leaders would "have to bring up questions of human rights and values in bilateral talks."

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rs, amp/rt (AFP, dpa, Reuters, AP)

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