[A2k] FT: US-Europe trade deal stuck on launch pad

Thiru Balasubramaniam thiru at keionline.org
Tue Dec 16 08:40:59 PST 2014

December 16, 2014 1:18 pm
US-Europe trade deal stuck on launch pad

Shawn Donnan, World Trade Editor
©EP <http://www.ft.com/servicestools/terms/epa>

David Cameron has called for “rocket boosters” and Angela Merkel has warned
there is “no time to lose”. Across the Atlantic, Barack Obama has said his
administration is intent on “reinvigorating” the entire exercise.

Eighteen months after the launch of talks between the EU
<http://www.ft.com/topics/organisations/European_Union>and US to create
what would be the world’s biggest free trade bloc,
sides are seeking to inject momentum.

Ministers and officials are coming to the conclusion that, unless something
radical changes — or both sides settle on something less ambitious — there
is unlikely to be a deal by the end of 2015 as some European politicians
have called for. Some officials now even contend that President Obama, who
leaves office in January 2017, is unlikely to be the US leader who
shepherds a great transatlantic pact through Congress.Yet even as trade
officials pledge a “fresh start” for the talks to build a Transatlantic
Trade and Investment Partnership (TTIP), a sense of resignation is setting

Commercial tensions are also clouding the picture. The pressure being
applied by European governments on US tech giants such as Google has caused
members of Congress to protest.

Europe’s community of trade officials, experts and campaign groups is also
engaged in a heated debate over what sort of protections — if any — foreign
investors should be accorded in an agreement with the US, an issue that has
helped mobilise opposition to a transatlantic pact.

Cutting a deal in 2015 would mean “not missing a beat” all year, says one
senior official involved. Another reckons it is “unrealistic” to think a
deal next year is even possible. At best, most involved say, the EU and US
might hope for some broad political agreement by the end of the year with
the details and actual texts to be filled in after that.

Even that approach, they point out, would mean talks dragging well into
2016 with final approval by the US Congress and the European Parliament
later that year or, more likely, early in 2017.

Sealing a deal by the end of 2015 “would take nonstop work,” says Miriam
Sapiro, who this year stepped down as the deputy US trade representative in
charge of the EU negotiations.

Yet that does not appear to be the way the schedule is shaping up. The next
round of negotiations is not due until February and only four or five
formal rounds are planned for 2015.

Momentum may pick up. Talks were launched largely for economic reasons, but
the case made by leaders for a stronger transatlantic alliance has become
increasingly geopolitical especially now they face a revanchist Russia.
There is a narrowing window of political opportunity before the US
presidential election in November 2016, with French and German elections
the following year.By comparison, the negotiators now nearing a deal for a
US-led, 12-country Trans-Pacific Partnership have been meeting almost
nonstop since the middle of this year. But on TTIP, there has been little
actual negotiation over the past 18 months.

A lot has been done “to put everything on the table”, Cecilia Malmström,
the new EU trade commissioner, said in Washington last week after meeting
with her US counterpart, Mike Froman. “But now is when the real
negotiations start.”

With political opposition rising, particularly in Germany, Ms Malmström has
taken a deliberate approach to the debate over investor protections and a
public consultation that has drawn more than 150,000 submissions. A
decision by the European Commission over how to proceed is now not due
until the spring, with negotiations on investment frozen until then.

Business groups are concerned that the lack of tangible progress has
emboldened a nascent anti-TTIP movement.

“What is important for business is that we see real progress and that at
the end of 2015 we find ourselves way ahead of where we are now,” says
Luisa Santos, director of international relations for BusinessEurope. “The
fact that we don’t see anything coming is not helping us to calm the debate
that is happening in Europe.”

Concerned over slow progress, Italy and other EU members have begun to push
for an interim deal
maintain momentum.

The oft-touted main goal of eliminating regulatory barriers to trade and
unnecessary duplication in testing is complex and will take time. They
argue a simpler deal to lower tariffs — already low on average but for some
goods still high enough to matter — would be a valuable boost to
transatlantic trade and could help sell a bigger agreement.

There are still fundamental political differences yet to be bridged for a
more comprehensive transatlantic deal. Many Europeans remain concerned a
deal would bring in American “Frankenfoods” such as chicken washed in
chlorinated water. It is unclear whether any government in Washington will
ever be able to override, as the EU hopes it might, the growing number of
“Buy America” public procurement laws that local governments have passed.

There are still open questions over whether financial services regulations
will be covered or how ensuring free data flows might be tackled in a
post-Snowden world. Also undecided is how the issue of energy will be

“The areas that [the US and EU] have differences on are difficult ones,”
says Ms Sapiro, who is now at the Brookings Institutions in Washington.
“There is a reason we have not negotiated a transatlantic trade agreement

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