Reference News, August 1 report: The German newspaper "Die Welt" website published an article titled "Public relations gimmick — Europe once again plays the 'soybean trick' in the energy agreement" on July 29. The following is a summary of the content:

The EU has committed, within the framework of the trade agreement with the US, to purchase energy products worth $25 billion annually. This has left business people puzzled.

First, who needs so much oil and natural gas? Second, are we not trying to reduce our dependence on a single supplier? Third, when did the European Commission become an energy trader?

After all, up until now, it is companies that have purchased oil and natural gas overseas, not countries, let alone a supranational organization like the EU. Brussels also does not have a procurement budget.

The scale of the commitment to purchase is shocking, with some industry insiders stating that the planned purchases of natural gas from the US will far exceed what is needed to replace Russian natural gas.

Furthermore, this contradicts the EU's political goal of not relying on a single supplier. After all, liquefied natural gas (LNG) from the US currently accounts for nearly 51% of the EU's needs.

Finally, natural gas traders are also wondering why President von der Leyen only set the total price, but not the quantity. If the price of natural gas drops sharply, will the EU still spend so much money to buy it?

Questions pile up, but the European Commission has yet to provide any answers. This is likely because the European Commission's purchase offer was not meant to be taken seriously, but rather a way to appease Trump and entice him to make concessions.

Von der Leyen's predecessor, Jean-Claude Juncker, successfully pulled off the same trick at the White House once before. Now, von der Leyen probably wants to use Juncker's "soybean trick" again on the issue of oil and gas.

In the tariff negotiations seven years ago, Juncker promised Trump that the EU would purchase a large amount of soybeans from the US — thereby avoiding Trump's imposition of high tariffs on most EU agricultural products.

Certainly, the European Commission did not personally get involved in buying agricultural products back then, just as it is not doing so now when it comes to energy. But Juncker understood the market: In 2018, China imposed tariffs on American soybeans, choosing to purchase them from Brazil and Argentina to meet its needs. The grain silos in the Midwest of the US quickly filled up, causing a sharp drop in the price of American soybeans.

Juncker knew what would happen: Since the price was so low, European buyers would inevitably step in to purchase. In other words, what Juncker promised Trump was simply a result that would naturally occur in the market.

Half a year later, in early 2019, the European Commission actually reported that EU imports of soybeans from the US had increased by 112% in a short period of time, making the US the largest supplier of this agricultural product to the EU. It looked like the EU had fulfilled its commitment under the "agreement," but in reality, it neither spent money nor took any action.

Whether or not Trump or his advisors knew that the agreement they reached with Europe was hollow, it made no difference to the political outcome: Trump could always present himself as a "savior" to American farmers, claiming that he had opened up alternative markets for American soybeans in the so-called difficult negotiations.

Von der Leyen's promise to purchase energy now may also be playing the same game. She knows that European companies will naturally purchase more natural gas from the US in the near future.

After all, due to the US's large-scale increase in liquefied natural gas (LNG) capacity by 2027, several market forecasting agencies have predicted that the price of US LNG will fall sharply, and European importers will not miss out on the cheap goods this time.

Just like Juncker handled the soybean issue, what von der Leyen has promised is merely a result that will naturally occur in the energy market, without requiring extra spending or policy measures to fulfill the commitment. However, unlike Juncker, she seems to have gained little benefit from it: The tariff agreement with the US is being criticized by the European business community.

European climate protection activists are even more outraged, accusing the agreement of creating new "fossil fuel dependencies." But they may be getting worked up for nothing. A senior energy trader speculated that the entire energy agreement between the EU and the US "may just be a public relations gimmick." (Translated by Wang Qing)

Original: https://www.toutiao.com/article/7533511098440385070/

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