China looks on as EU-US trade talks get serious
EU and US want to dispel international anxiety about their rush to agree regional trade deals.
Renegotiating Europe’s trade links with China
The European Union and the United States are next week to hold a second round of negotiations on a transatlantic free-trade deal that they hope could deliver vast economic benefits.
The negotiations will be a substantial test of the EU’s ability to extract economic advantages in a globalised economy where power is shifting away from the Atlantic and the US and EU can no longer dominate world trade talks.
After an earlier round of courtesies in July, the negotiations now begin in earnest. In the course of five days (7-11 October), the two teams will meet in Brussels and address head-on many of their differences over regulation, the area in which liberalisation has the greatest potential to provide a boost to the transatlantic economy.
The EU-US trade talks will be led by Michael Froman, the US’s trade representative, and Karel De Gucht, the European commissioner for trade, who had a preliminary meeting in Brussels on Monday (30 September). Afterwards both dwelt at length on the need, where possible, to recognise each others’ existing rules as a means of lowering barriers to trade.
De Gucht emphasised that “we should ultimately strive for the mutual recognition of our regulations across a broad range of sectors”, arguing that this is “the most efficient way to connect our two systems to allow our businesses to operate more effectively across the Atlantic”.
In two weeks’ time, the EU’s trade ministers will discuss whether to give the European Commission a mandate to negotiate with China an investment agreement. Such an agreement would, the Commission hopes, improve economic relations between the EU and China, which have been soured recently by a dispute over imports of Chinese solar panels.
The Chinese have already expressed suspicion that the EU intends to forge a protectionist alliance with the US, and both the EU and US are conscious of the need to dispel international anxiety about their rush to agree regional trade deals.
The US is currently also in talks on a trans-Pacific trade deal, recently enlarged to include Japan, and earlier this year the European Commission began negotiations to liberalise trade with Japan.
The EU and US negotiators know that the greatest threat to a deal is drift and they will be looking next week to generate early momentum. Their intention is to agree at the outset broad principles that would enable them to make quick progress.
They will begin to alarm domestic constituencies as soon as they discuss particular economic sectors, though officials on both sides have repeatedly cited the car and aviation industries as examples in which recognition of each others’ standards would not compromise safety.
The negotiators are trying to allay concerns about the impact of a broad-brush approach. De Gucht said that the talks would not “water down Europe’s current set of rules and regulations”, while Froman said that the negotiations were “not about launching a broad deregulatory agenda”. De Gucht has repeatedly voiced similar views.
The two sides argue that a Transatlantic Trade and Investment Partnership (TTIP) would promote trade liberalisation globally. But they face a challenge convincing the World Trade Organization (WTO) about the TTIP’s implications for global trade. The WTO is preparing for talks in Bali in December.
“We see TTIP as an opportunity to raise the standards, to introduce new disciplines and ultimately to strengthen the multilateral trading system,” Froman said on Monday.
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