Thursday

24th May 2018

Pacific trade deal puts spotlight on EU-US talks

  • The deal covers 40 percent of the world economy (Photo: dawvon)

Twelve Pacific countries including G7 members the US, Japan, and Canada signed a free-trade agreement Monday (5 October) that could have major implications for world trade and EU trade talks with the US.


The Trans-Pacific Partnership (TPP), which was negotiated for five years and concluded after an intensive last round of talks, will cover about 40 percent of the world economy.

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  • Obama: 'We can’t let countries like China write the rules of the global economy' (Photo: whitehouse.gov)

The deal was finalised in Atlanta after the US and Australia agreed how long bio-tech companies can keep a monopoly on new drugs. The US had wanted the monopoly to last 12 years. Australia and other countries wanted five years. A compromise was found for eight years.

Other countries to participate in the TPP are Mexico, New Zealand, Chile, Malaysia, Mexico, Peru, Singapore, Vietnam, and Brunei. China is not part of it.

"We can’t let countries like China write the rules of the global economy", US president Barack Obama said in a statement.

"We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment".

Obama is trying to woo Congress to ratify the deal. Before summer, an alliance between some Republicans and Democrats tried to deprive Obama of the fast track authority to negotiate the TPP.

 Several presidential candidates also oppose the deal.

“It’s a horrible deal for the United States and it should not pass," Republican leading candidate Donald Trump said.

Bernie Sanders, Hillary Clinton's main opponent for the Democratic nomination, said the TPP is "disastrous".

TTIP

Obama's comments, as well as the Congress ratification process and politcians' opposition will be closely watched in Europe.

The TPP has been considered as a trial run for the Transatlantic Trade and Investment Partnership (TTIP) between the US and the EU.

Many of the sectors covered by TPP will be covered in TTIP too, for instance, regulations for agriculture, intellectual property, the environment, and investment.

In recent months, many in Europe felt TTIP talks had stalled, partly due to difficulties the US had in concluding the TPP talks.

"There is too much asymmetry, not enough reciprocity," French trade minister Matthias Fekl said in an interview last week.

The EU Commission, which is negotiating TTIP on behalf of member states, did not react officially to the TPP deal. But trade commissioner Cecilia Malmstroem expressed satisfaction on her Twitter account.

"Happy to hear that negotiations on TPP are concluded!", she wrote.

Stephen Gardner, the US envoy to the EU, also tweeted: "TPP is done! Massively important deal for U.S. relations with AsiaPacific region. Let’s get TTIP done!".

Bernd Lange, the German social-democrat chair of the European Parliament's trade committee, said the deal "clears the path for changing gears in the transatlantic negotiations".

New round

"Now is the time to move forward with TTIP," he said in a statement to EUobserver.

"I hope our American partners will fully dedicate their efforts to engage in the negotiations and bring forward ambitious and comprehensive proposals which the EU has been waiting for".

A new round of EU-US negotiations will take place in the second half of October in the US.

Uncertainties over TPP ratification could EU as well as continued criticism in Europe could prevent talks to be concluded soon.

In his letter of intent for 2016, Commission president Jean-Claude Juncker said he aimed at "mak[ing] sustained progress" with no reference to a deadline.

"The Commission is ready to make progress in the negotiations in so far as member states want it", a spokesperson said last week.

An EU source told EUobserver Monday that the US always said it could conduct both negotiation processes at the same time and that the EU would expect the TTIP talks to go on.

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