Tuesday

16th Aug 2022

EU-US trade talks imminent, as commission agrees mandate

  • US trade talks - a silver bullet for the EU economy? (Photo: Wikipedia)

The European Commission has agreed its negotiating mandate for an EU-US trade deal, paving the way for talks to begin before the summer break.

Speaking on Tuesday (12 March), trade commissioner Karel de Gucht, who will lead the EU's negotiating team, told reporters in Strasbourg that both he and his US counterparts were aiming for a quick agreement on "one tank of gas."

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He said that a deal could be concluded before the 2014 European elections next June, a timing which would also coincide with the next round of US mid-term Congressional elections.

The US is keen for negotiations to begin. At a meeting of his export council on Tuesday (12 March), President Barack Obama said that trade talks with the EU and 10 countries in the Asia-Pacific region were at the heart of the economic strategy for his second term.

For his part, EU commission President Jose Manuel Barroso described the talks, aimed at agreeing the world's largest single bilateral trade deal, as a "game changer" for transatlantic relations and world trade.

The commission's negotiating team is anxious for talks to go beyond eliminating traditional tariff barriers.

De Gucht commented that while he would "work to remove remaining tariffs … we really need to deal with behind the borders trade barriers." This is likely to include harmonised regulations on products and services.

He also insisted that "persistent concerns" that a trade deal could lead to EU legislation on GMOs being re-written were wide of the mark.

However, the commissioner refused to be drawn on the specifics of the EU's stance, commenting that "you cannot negotiate with an open book."

He added that while the commission would keep governments and MEPs informed on the "direction" of talks, documents related to the negotiations would not be made public.

Irish trade minister Richard Bruton, who will now set about persuading member states to sign off on the EU's negotiating stance, described it as a "significant step on the road to a new EU-US trade and investment partnership. He added that he was "confident that real progress can be achieved during the remaining months of the Irish presidency.”

Meanwhile, the EU executive also released a paper by the Centre for Economic Policy Research (CEPR), a London-based think tank, indicating that a US trade deal could be worth up to €119 billion per year to the EU economy, translating into €545 per year for the average family of four.

That said, failure to go beyond agreement on tariff barriers would lead to economic gains of no more than €23.7 billion, according to the CEPR. Liberalising the services market and public procurement rules would be worth an additional €5.3 billion and €6.4 billion.

The CEPR report also claims that 80 percent of the total gains from a trade deal could come from cutting bureaucratic costs and red tape.

Europe's car manufacturers, which include BMW, Renault and Mercedes Benz could be the biggest winners from a trade deal.

The CEPR estimates a 149 per cent increase in car exports to the US due, in large part, to two-way trade in car parts and components. The metal, chemical and food industries would also be major beneficiaries.

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