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Transatlantic Trade Talks are “On Track” but Face Challenges, Officials Say

Thursday, February 20, 2014
Sandler, Travis & Rosenberg Trade Report

A meeting between U.S. Trade Representative Mike Froman and European Union Trade Commissioner Karel De Gucht in Washington this week left both seeing opportunities and challenges as negotiations on the Transatlantic Trade and Investment Partnership continue. The next round of TTIP talks is scheduled for the week of March 10 in Brussels, and the two senior officials plan to meet again in the fall.

In a Feb. 18 speech to the Atlantic Council, De Gucht said he and Froman agree “things are on track” and “now have a clear picture of the whole field,” but he added that the areas that need more work are larger than the areas where common ground has been identified. This means that “the next phase is going to be harder going,” he said, and so if the two sides “want to finish on the now proverbial single tank of gas … we need to step up a gear.”

De Gucht said the negotiations are divided into three areas: market access, rules and regulatory cooperation. On market access, the first tariff offers were exchanged this week, offers on services are still being prepared but should be on the table soon, and “steady progress” is needed on public procurement. On rules, he said that TTIP will include provisions on trade facilitation that go beyond the recent World Trade Organization agreement, disciplines on state-owned enterprises and raw materials and energy, and labor and environmental standards that could “go beyond what we have been able to include in previous trade agreements.” He indicated that the two sides have made “particularly good progress” on small and medium-sized enterprises.

The third area – reducing regulatory differences to facilitate trade – is “certainly the most difficult … but also the most important,” De Gucht said. The difficulty is both technical, because there must be an understanding of the purpose of the laws and rules at issue as well as “entire new fields of expertise,” and political, because of the sensitivity of certain issues and the desire to maintain “the levels of regulatory protection that our citizens have chosen.” Overcoming these challenges is possible, he noted, pointing out that “30 years ago, the European Union went much further than we will go with TTIP” on regulatory cooperation, but “will require hard work from trade negotiators and from regulatory authorities.” This will have to include both a discussion of “the way we produce regulation,” including how processes can be made more transparent and regulators can increase cooperation, and efforts to find  “a critical mass of regulatory solutions for specific sectors,” including automobiles, drugs and medical devices, finance, and food products. On the other hand, he emphasized that “we are not lowering standards in TTIP” and that “no trade agreement will be able to change the European and American models we base our societies on.”

Froman, on the other hand, said little about his stocktaking session with De Gucht or how the U.S. and EU might seek to move forward. He said they had “charted paths forward” on “some of the most difficult issues that confront us,” including “eliminating tariffs on all goods we trade between each other; reducing unnecessary regulatory barriers to trade while maintaining appropriate levels of health, safety, and environmental protection; and expanding transatlantic opportunities for our service providers.” While there are challenges ahead, Froman said, “our resolve and the political will to reach an ambitious, comprehensive agreement remain strong.”

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