The United States and the European Union have published the formal version of their trade agreement a new “Framework Agreement on Reciprocal, Fair, and Balanced Trade”.

The agreement contains a whole chapter on Standards and Regulations where the EU commits to undertake efforts to ensure that the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) do not pose undue restrictions on transatlantic trade. In the context of CSDDD, this includes undertaking efforts to reduce administrative burden on businesses, including small- and medium-sized enterprises, and to propose changes to the requirement for a harmonised civil liability regime for due diligence failures and to climate-transition-related obligations. The European Union commits to work to address US concerns regarding the imposition of CSDDD requirements on companies of non-EU countries with relevant high-quality regulations.

Key Highlights of the Framework Agreement:

• Tariffs: EU to eliminate tariffs on all US industrial goods and expand preferential access for US agricultural and seafood products.
• US Tariff Commitments: Caps tariffs on EU goods at 15% and applies only MFN rates to sectors such as pharmaceuticals, aircraft, and natural resources starting September 1, 2025.
• Automobiles & Section 232 Tariffs: US to reduce or eliminate certain automobile tariffs once the EU enacts its tariff reduction proposals.
• Energy & Technology: EU commits to procure $750B in US energy products and $40B in US AI chips through 2028, with stronger tech security cooperation.
• Investment: EU firms expected to invest an additional $600B in the US across strategic sectors by 2028.
• Defence: EU to substantially increase procurement of US defence equipment.
• Standards & Regulations: Mutual recognition of auto standards, streamlined agri-food certifications, cooperation on sustainability rules, digital trade, and cybersecurity.
• Global Issues: Cooperation on supply chain resilience, critical minerals, labour rights, intellectual property, and WTO commitments on digital trade.

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