6th Jul 2022

US budget trouble hits EU trade talks

  • EU/US trade talks are on hold as part of the US government shutdown (Photo:

Talks between the EU and US on a landmark trade deal have been cancelled this week as a result of the continuing government shutdown in Washington DC.

US trade officials were expected to arrive in Brussels on Monday (7 October) for the second round of negotiations on a proposed Transatlantic Trade and Investment Plan (TTIP) with talks planned to last all week.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

As yet there are no indications of when the talks will be rescheduled.

The US government was forced into a partial shut-down last week, after Democrats and Republicans in Congress failed to reach a deal on the country's budget.

Republicans are refusing to adopt new spending plans unless President Obama's healthcare reforms are blocked or are stripped of funding, three years after the bill was adopted in Congress.

Only essential government functions will take place until the two parties reach an agreement with thousands of state employees going without pay.

However, a deal needs to be reached by 17 October, the date when the US is due to default on its debt repayments.

Obama also scrapped plans to attend the Asia-Pacific Economic Co-operation summit in Bali, the other key priority of US trade policy, although US Trade Representative Michael Froman was present.

Speaking with Bloomberg television on Sunday (6 October), Froman said that there could be little progress in trade negotiations until the end of the shut-down.

“We’ve had to pull back on our negotiations, we’ve had to stop some of our enforcement efforts, we’re not able to monitor a lot of our existing agreements,” he said.

The cancellation of the talks will also come as a blow to EU officials, particularly the commission's trade chief, Karel de Gucht, who has set an ambitious deadline - next year - for concluding the talks.

The EU executive believes that a trade deal harmonising technical and regulatory standards, as well as scrapping remaining tariff barriers, could be worth up to 1 percent of GDP.

In a statement released Friday (4 October), de Gucht described the move as “unfortunate” but did not undermine the “clear commitment of the EU and the US to the TTIP process.”

“It in no way distracts us from our overall aim of achieving an ambitious trade and investment deal between Europe and the US,” he added.

For her part, Marietje Schaake, a Dutch MEP on the Parliament's US delegation, called on the two sides to continue talks “via digital means” until the US side could re-open formal negotiations.

Trade officials 'optimistic' following EU-US talks

EU and US trade negotiators signalled their satisfaction at the close of the first week of talks aimed at securing a potentially lucrative bilateral trade agreement worth €119 billion per year.

News in Brief

  1. Turkey signs Nato protocol despite Sweden extradition row
  2. European gas production hit by Norway strike
  3. EU Commission told to step up fight against CAP fraud
  4. Ukraine needs €719bn to rebuild, says PM
  5. Germany records first monthly trade deficit since 1991
  6. Pilots from Denmark, Norway, and Sweden strike
  7. Report: EU to sign hydrogen deal with Namibia
  8. Israel and Poland to mend relations

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  2. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  3. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  4. Council of the EUEU: new rules on corporate sustainability reporting
  5. Nordic Council of MinistersNordic ministers for culture: Protect Ukraine’s cultural heritage!
  6. Reuters InstituteDigital News Report 2022

Latest News

  1. 'World is watching', as MEPs vote on green finance rules
  2. Turkey sends mixed signals on Sweden's entry into Nato
  3. EU Parliament sued over secrecy on Nazi MEP expenses
  4. Italy glacier tragedy has 'everything to do' with climate change
  5. The Digital Services Act — a case-study in keeping public in dark
  6. Report slams German opposition to new child sexual abuse rules
  7. Is China a challenge to Nato? Beijing responds
  8. ECB announces major green shift in corporate bond-buying

Join EUobserver

Support quality EU news

Join us