By Philip Blenkinsop
BRUSSELS (Reuters) - The European Union's trade chief described on Thursday the lack of a full trade accord between the bloc and the United States as ridiculous, but said the best that could be expected now was only a very modest agreement.
Trade Commissioner Cecilia Malmstrom also rebuffed suggestions that the EU should simply seek to settle its differences over tariffs with the United States at the World Trade Organization, questioning whether the WTO's appeals process could survive in the longer term.
EU leaders agreed last week to discuss opening their markets wider to U.S. imports, including cars, to avert a trade war with President Donald Trump.
After Trump's 2016 election victory, the EU shelved negotiations towards an ambitious agreement called the Transatlantic Trade and Investment Partnership (TTIP) that had aimed to set global trading standards for others to follow.
Malmstrom said she still believed TTIP was a good idea, but added that "taking TTIP out of the freezer is not on the agenda".
"To not have a trade agreement between the EU and the U.S. is ridiculous when we have trade agreements with the whole world, but the elements are not there to revive TTIP as it was," she told the European Business Summit conference.
Reducing tariffs on industrial goods would result in a "very limited agreement", she added.
Since Trump became president, the EU has focused on championing open markets and sealing trade accords with like-minded countries. It has struck deals with Japan and Mexico, and is in talks with the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay. Negotiations with Australia and New Zealand are due to start in July.
The offer of trade discussions with the United States is dependent on Washington continuing to exempt EU producers from import tariffs on steel and aluminum beyond a June 1 deadline.
Philippe Lamberts, who co-chairs the Greens group in the European Parliament, said EU leaders and senior officials were "rushing to Washington and begging" and said the bloc should cut off talks and just threaten a legal challenge at the WTO.
Malmstrom disagreed. "We are not begging. We are asking, we are demanding to be excluded (from the tariffs)," she said, adding the EU could not simply rely on the WTO to intervene.
The European Commission has said that if Trump imposes metals tariffs on EU producers it will go to the WTO and also respond with its own import duties on U.S. products, including motor bikes and whisky.
However, a WTO process could take two years. "During these two years, our companies will suffer immensely ... and the problem with the WTO right now is that the appellate function in two years might not exist," she said.
Trump has effectively engineered a crisis in the WTO's system of settling global disputes by vetoing all appointments of judges to its appeals chamber.
This has reduced what is supposed to be the seven-strong Appellate Body as members' terms expire. By September four seats will be vacant, leaving only three judges, the number required to hear each appeal. If one judge needs to recuse themselves for any legal reason, the system will break down.