The EU on Thursday defended its push to reform the European defense industry in a retort to U.S. accusations that the overhaul would shut out allies such as Washington from European projects.

The skirmish over military spending comes as transatlantic ties are at a long-time low with fears running high that cooperation at NATO could be endangered.

In a letter seen by AFP, two senior officials said that the European Union “remains fully committed to working with the U.S. as a core partner in security and defense matters” despite the planned changes.

However, the EU officials also insisted that the mooted reforms are merely a reflection of rules already imposed by the U.S.

“The transatlantic trade balance is resolutely in favor of the U.S.,” they insisted.

The U.S. concerns, set out in a letter on May 1 from two of President Donald Trump’s top defense officials, focused on the European Defense Fund (EDF), a seven-year 13-billion euro ($14.6 billion) pot approved by the European Parliament last month, and a key new EU defense cooperation pact known as PESCO.

Washington warned the proposed rules “would not only damage the constructive NATO-EU relationship we have built together over the past several years but could potentially turn the clock back to the sometimes divisive discussions about EU defense initiatives that dominated our exchanges 15 years ago.”

Along with the warnings, the U.S. officials also make a veiled threat to hit back, saying the EU would object to similar U.S. restrictions “and we would not relish having to consider them in the future.”

EU countries launched PESCO in late 2017 to try to harmonize a highly fragmented approach to defense spending.

Under the pact, countries cooperate on projects to develop new military equipment and on support systems such as military hospitals and training centers.

The U.S. letter chimed with bitter divisions within the bloc on what rules to set for non-EU allies such as the U.S., Norway — and for Britain after Brexit — who want to contribute to future defense projects.
…