 "Trans-Atlantic trade deal talks are faltering. What's at stake?")
The United States and the European Union have had 14 rounds of talks over three years on a trade and investment deal aimed at creating the world’s largest trading zone, but they are making slow progress.
Facing stiff headwinds in Europe (over wariness about the influence of business) and the United States (because of mounting scepticism over free trade), the negotiations have languished. The most recent round of talks concluded on Friday with no breakthroughs announced. Here is a primer on the deal: the Trans-Atlantic Trade and Investment Partnership, or TTIP.
What the deal is about
At its core, the deal seeks to provide economic stimulus by bolstering trade in the aftermath of the financial and European sovereign debt crises. But there is more at stake. A grander goal of the negotiations has been to enable Western countries to compete with rising economic powers like China and India by setting mutually agreed standards in areas like car safety, cosmetics and chemicals. A backlash against globalisation on both sides of the Atlantic, however, makes the deal a test case for the West’s commitment to trade liberalisation.
The main sticking points
Relatively straightforward parts of the talks — like lowering tariffs — remain under discussion, and both sides face making delicate trade-offs.
The Europeans are seeking concessions so that their companies can do more business with federal and state authorities in the US that are currently required to buy American goods and services. They also want to protect the names of foods like Parma ham and Roquefort cheese from being used by American manufacturers.
On the other side, the United States wants firm protections for investments by American companies in Europe, in case a member state fails to uphold the terms of the pact. It also wants far greater access to European food and agricultural markets to sell more of its produce, including beef, which is banned in Europe if treated with growth-promoting hormones.
How does Britain’s Brexit vote affect the talks?
Britain has long been among the most enthusiastic supporters of free trade in Europe, but its vote last month to leave the European Union will make the country less of a force in the negotiations.
Although Britain is expected to remain a member of the European Union for at least two more years, it will most likely turn its attention to seeking new trade deals with other parts of the world. That could put pressure on the Europeans to make concessions to complete the deal, but it could also strengthen the influence of other big member states like France, which generally takes a more protectionist approach to trade than Britain.
“The withdrawal of the UK from the EU market would affect the value of the EU market,” L Daniel Mullaney, the chief American negotiator, told a news conference on Friday in Brussels. He noted that a quarter of United States exports to the European Union go to Britain, and that the prospect of Britain’s dropping out of the deal was like the United States’ saying, “maybe TTIP will not apply to California.”
What are the chances of a deal during the Obama presidency?
The chances are slim, unless there are significant compromises from both sides before President Obama leaves office in January. Elections in the United States this year, and in France and Germany next year, are expected to make it hard for leaders to promote a deal aimed at opening up their economies even as many citizens face day-to-day uncertainty.
Large movements in countries like Germany have mobilised against the deal, arguing it would lead to the privatisation of public services and lower standards for food safety and environmental protection. This week, several groups of protesters rallied at buildings in Brussels where negotiations were taking place, delaying the start of some of the talks. One group dressed in animal costumes briefly occupied another building used by European Union trade officials to protest trade treaties they considered environmentally harmful.
In the United States, Obama still has not succeeded in winning ratification of the Trans-Pacific Partnership, a far more advanced deal. Ratifying that is likely to remain his paramount goal while in office.
What now?
More negotiations are expected after the summer, though no dates have been set. European trade ministers will hold meetings in September and October to determine whether there is sufficient political will to give the negotiations a final push.
In the United States, the picture is also politically charged. Hillary Clinton, who is expected to be the Democratic candidate for the presidency, has blown hot and cold on trade over the course of her campaign. Donald J Trump, the presumptive Republican challenger, has shown outright hostility.
©2016 The New York Times News Service
Facing stiff headwinds in Europe (over wariness about the influence of business) and the United States (because of mounting scepticism over free trade), the negotiations have languished. The most recent round of talks concluded on Friday with no breakthroughs announced. Here is a primer on the deal: the Trans-Atlantic Trade and Investment Partnership, or TTIP.
What the deal is about
At its core, the deal seeks to provide economic stimulus by bolstering trade in the aftermath of the financial and European sovereign debt crises. But there is more at stake. A grander goal of the negotiations has been to enable Western countries to compete with rising economic powers like China and India by setting mutually agreed standards in areas like car safety, cosmetics and chemicals. A backlash against globalisation on both sides of the Atlantic, however, makes the deal a test case for the West’s commitment to trade liberalisation.
The main sticking points
Relatively straightforward parts of the talks — like lowering tariffs — remain under discussion, and both sides face making delicate trade-offs.
The Europeans are seeking concessions so that their companies can do more business with federal and state authorities in the US that are currently required to buy American goods and services. They also want to protect the names of foods like Parma ham and Roquefort cheese from being used by American manufacturers.
On the other side, the United States wants firm protections for investments by American companies in Europe, in case a member state fails to uphold the terms of the pact. It also wants far greater access to European food and agricultural markets to sell more of its produce, including beef, which is banned in Europe if treated with growth-promoting hormones.
How does Britain’s Brexit vote affect the talks?
Britain has long been among the most enthusiastic supporters of free trade in Europe, but its vote last month to leave the European Union will make the country less of a force in the negotiations.
Although Britain is expected to remain a member of the European Union for at least two more years, it will most likely turn its attention to seeking new trade deals with other parts of the world. That could put pressure on the Europeans to make concessions to complete the deal, but it could also strengthen the influence of other big member states like France, which generally takes a more protectionist approach to trade than Britain.
“The withdrawal of the UK from the EU market would affect the value of the EU market,” L Daniel Mullaney, the chief American negotiator, told a news conference on Friday in Brussels. He noted that a quarter of United States exports to the European Union go to Britain, and that the prospect of Britain’s dropping out of the deal was like the United States’ saying, “maybe TTIP will not apply to California.”
What are the chances of a deal during the Obama presidency?
The chances are slim, unless there are significant compromises from both sides before President Obama leaves office in January. Elections in the United States this year, and in France and Germany next year, are expected to make it hard for leaders to promote a deal aimed at opening up their economies even as many citizens face day-to-day uncertainty.
Large movements in countries like Germany have mobilised against the deal, arguing it would lead to the privatisation of public services and lower standards for food safety and environmental protection. This week, several groups of protesters rallied at buildings in Brussels where negotiations were taking place, delaying the start of some of the talks. One group dressed in animal costumes briefly occupied another building used by European Union trade officials to protest trade treaties they considered environmentally harmful.
In the United States, Obama still has not succeeded in winning ratification of the Trans-Pacific Partnership, a far more advanced deal. Ratifying that is likely to remain his paramount goal while in office.
What now?
More negotiations are expected after the summer, though no dates have been set. European trade ministers will hold meetings in September and October to determine whether there is sufficient political will to give the negotiations a final push.
In the United States, the picture is also politically charged. Hillary Clinton, who is expected to be the Democratic candidate for the presidency, has blown hot and cold on trade over the course of her campaign. Donald J Trump, the presumptive Republican challenger, has shown outright hostility.
©2016 The New York Times News Service