The European Union and the United States launched negotiations on Monday (17 June) to forge a comprehensive transatlantic trade and investment partnership (TTIP), after overcoming a long-fought battle on excluding the audiovisual sector, led by France.
"Our joint endeavour is part of our overall agenda for growth and jobs on both sides of the Atlantic by boosting trade and investment. It is also a powerful demonstration of our determination to shape an open and rules-based world," said European Commission president José Manuel Barroso, speaking at a press conference at the Group of Eight (G8) summit in Northern Ireland.
"We intend to move forward fast. We can say that neither of us will give up content for the sake of speed, but we intend to make rapid progress," he added.
Brussels and Washington hope to deliver on their promise by the end of the Commission’s mandate in October 2014. Although many argue that the ambitious timing is unrealistic, considering the EU has been negotiating a free-trade agreement with Canada for more than four years. Others point to NAFTA, the North America Free Trade Agreement, which was negotiated in 14 months.
Road paved with obstacles
The road will be paved with obstacles though, as proved by the recent clash to protect movies and culture, a movement led by France.
Paris insisted that the audiovisual sector be excluded from the negotiations. After 13 hours, a compromise was finally reached agreeing to the French demand but which also stated that the Commission could revisit the question if necessary.
The long battle over the exemption of the audiovisual sector from the negotiating mandate prompted president Barroso to say, in an interview with the International Herald Tribune, that those fearful of a US cultural invasion of Europe "have an anti-global agenda".
Such critics have "no understanding of the benefits that globalisation brings also from a cultural point of view," he added, describing that opposition as "culturally extremely reactionary".
A chorus of French voices reacted sharply to Barroso’s comments. Jean-Christophe Cambadélis, a national secretary of France's ruling party, described the top EU official’s remarks as "intolerable", saying he should "retract his comments or quit".
A Commission spokesman said there is no basic disagreement between the Commission and the French government on this question.
“The Commission feels that some countries need to change to remain a global player in the time of globalisation. We are here to constructively debate with all other stakeholders and not be insulted for our ideas,” he added.
Speaking in Ulster yesterday, Barroso said he does not underestimate the core challenge of such an ambitious trade deal: moving regulatory regimes closer and addressing the harmful effects of behind-the-border trade barriers.
“Huge economic benefits are expected from reducing red tape and avoiding divergent regulations for the future. I would rather have our companies invest in new innovative products and services and job creation than in double testing and multiple inspections or even separate manufacturing lines,” he added.
A comprehensive EU-US deal could over time boost EU GDP by 0.5% annually and help create approximately 400,000 jobs in the EU, according to the European Commission.
The United States and Europe account for almost half of the world's total output and a third of its trade and the transatlantic partnership is already the biggest in the world – trading €2 billion of goods and services every day.
A study, published yesterday by the Bertelsmann Foundation shows that a transatlantic trade deal would mainly benefit Washington. Economists at the Munich-based IFO institute, which did the study, found a deal would lead to a 13,4% increase in US income per head over the long term, but only an average of 5% rise among the EU’s 27 member states.
"For the sake of the jobs it creates, and because of the strategic dimension of what we are doing: to write the next chapter of what is our common history, forged by the sense that we share the same principles and values, the principles and values of open economies and open societies," Barroso argued.
Impact of TTIP on the rest of the world
The question that still remains is what will be the impact of such a free-trade zone on relations with developing and emerging economies.
Barroso reiterated yesterday that such a deal “is also good for the rest of the world.”
“Given the integrated supply chains in today's global markets, everyone can benefit from this agreement,” he said.
Following the collapse of Doha round in 2008, both the United States and Europe have sought to strike as many free-trade agreements as possible, and Brussels alone is negotiating with more than 80 countries.
The first round of EU-US negotiations will take place in Washington on July 8, the White House said in a statement.
We are pleased to see that EU trade ministers last week have not lost sight of what is at stake. We must now keep our determination and ambition in the negotiations that lie ahead of us. The real work starts now in bringing this process to a successful conclusion, both for our businesses and our citizens,” said Alessandro Barberis President of EUROCHAMBRES.
Gunilla Almgren, President of UEAPME, added: “The European Union has a unique opportunity to boost economic growth by launching negotiations on a trade agreement with the United States, the Transatlantic Trade and Investment Partnership (TTIP). Done properly, the TTIP will give European firms – especially small and medium sized enterprises – much greater access to a huge market, by reducing or even eliminating market access barriers and tariffs."
Cécile Despringre, Executive Director of the Society of Audiovisual Authors said: "We are delighted to see that the Council managed to find the compromise that enabled ambitious trade negotiations to start without sacrificing Europe's ability to re-define its cultural policies in the digital age.”
The EU-US trade relationship is already the biggest in the world – trading €2 billion of goods and services every day.
The Transatlantic Trade and Investment Partnership (TTIP) will extend beyond the removal of tariffs, to include the opening of markets on investment, services and public procurement. In addition, it will focus on aligning rules and technical product standards which currently form the most important barrier to transatlantic trade.
According to assessments made by the European Commission and other EU bodies, a comprehensive Trade and Investment Partnership could over time boost EU GDP by 0.5% annually and help create approximately 400,000 jobs in the EU.
- 8 July: First round of negotiations
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