EU and US negotiators resume talks on Monday (19 October) to advance on the Transatlantic Trade and Investment Partnership, with mistrust and public opposition standing in their way.
The 11th round of discussions, to be held in Miami, will address a still-substantial list of differences on key issues between the two sides, after more than two years of talks on the ambitious Transatlantic Trade and Investment Partnership.
But they come after Washington scored a major triumph with the agreement two weeks ago to set up a Pacific free trade group with Japan, Canada and nine other countries.
Both groupings aim at broadly lowering trade tariffs and non-tariff barriers, a relatively small issue between the United States and Europe, where trade taxes are already very low.
But they also aim higher, at setting what the White House calls the rules for 21st century trade and investment, with a special focus on digital trade and intellectual property issues, and on harmonizing regulations for global business.
A deal would tie together two giant economies that are home to some 850 million people and account for about half of global output.
But the success of the Trans-Pacific Partnership talks will not necessarily make the hefty task of getting Americans and Europeans to agree on a similar project any easier.
Supporters say a transatlantic trade deal will give a strong boost to economic growth and job creation.
But on both sides of the Atlantic, most intensely in Europe, the talks have been branded a Trojan horse over a broad and secretive watering down of important public regulations that could threaten health and environmental standards to the benefit of powerful multinational corporations.
Showing that the opposition has not weakened, the anti- TTIP movement has collected three million signatures in support of its effort to halt the negotiations.
It drew as many as 250,000 people to an anti-trade deal protest in Berlin on 10 October.
Politicians on both sides are also expressing misgivings, especially around the intense secrecy of the negotiations, with a top French official recently lashing out at Washington’s stance.
“There has to be substantial changes in the general mindset, that is in trust, reciprocity, and access to documents,” French Foreign Trade Minister Matthias Fekl said early this month, warning of a “halt, pure and simple” to the talks.
Opponents have, in particular, focused on the inclusion of an extra-national investor-state dispute (ISDS) mechanism in the talks, which would allow foreign investors to challenge governments via a trans-national tribunal.
Critics say that could give them more power over local laws and policies, and effectively more rights than a country’s citizens have. They also say ISDS is unnecessary.
“Given the advanced judicial systems of both the US and EU, ISDS is an unwarranted risk to domestic policy-making at the local, state and federal levels,” said the US labor federation AFL-CIO.
Faced with a public outcry, the European Commission, in charge of the talks, proposed as an alternative a special court of magistrates to handle such foreign investor litigation.
EU Trade Commissioner Cecilia Malmstroem said in early August that the general atmosphere of distrust was a barrier to reaching a pact.
“For now, the negotiations are very difficult to sell in the European Union because they have yielded nothing concrete,” she told AFP.
“We will put everything on the table, see where we are and how to advance,” she said.
“I hope we will be in a position to make joint announcements with Mr. Froman to give substance to the negotiations,” she added, referring to her negotiating counterpart, US Trade Representative Michael Froman.
The Miami talks will not cover ISDS, as the EU develops its alternative proposal. They will focus, for one, on government procurement standards that favor local businesses. US states are especially resistant to pushes to open their contracts to foreign competitors.
“State-level procurement in the US is very important for us,” said an EU Commission official last week.
Other issues under discussion are “very technical,” the official said, including technology-related regulations, and more tariff issues.
Put off, probably to the final rounds, will be farm issues, extremely contentious as Europe holds substantial barriers to US products and are loath to weaken their standards.
Negotiations between the United States and the European Union to forge an ambitious Transatlantic Trade and Investment Partnership (TTIP) started in July 2013.
If successful, the deal would cover more than 40% of global GDP and account for large shares of world trade and foreign direct investment.
The EU-US trade relationship is already the biggest in the world. Traded goods and services between the two partners are worth €2 billion daily.
Brussels and Washington have set an ambitious goal of completing negotiations by the end of 2015.
Pacific trade ministers recently reached a deal on the Trans-Pacific Partnership, a move that is predicted to reinvigorate TTIP negotiations.