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Image header Agence Europe
Europe Daily Bulletin No. 10788
A LOOK BEHIND THE NEWS / A look behind the news, by ferdinando riccardi

EU-US free trade project - significance, hopes and obstacles

Dream or reality? - Well what a carry on, this free trade project between the United States and Europe! It was enough for Barack Obama to mention it in his State of the Union speech, and the next day the European Commission rushed into presenting this project with an abundance of detail. The media followed up on this, and here we are that the EU - presented again the previous day as ineffective and almost moribund - is changing its image and - at least for some - is becoming positive and ambitious. The earlier complaints were probably exaggerated, and then we intensified the situation with a bright future that is presented as already in the bag. Of these two extremes, I prefer the second.

Take a re-read of EUROPE 10786 for the official statements. The two main global economic powers are going to form the biggest ever free trade area which will be translated for the EU into billions of euros per year and tens of thousands of new jobs - without any cost for the taxpayer. In the view of Karel De Gucht, the trade commissioner, the transatlantic economic alliance will be revolutionary, because its aim is the elimination not only of customs duties, but also other trade barriers - related to services, public contracts, and so-called red-tape obstacles. Between the EU and the USA customs duties are already very low - the essential part is elsewhere.

Hopes and obstacles. The project has generally been viewed as a fundamental element for European economic recovery. Yet the obstacles are considerable. The first obstacle concerns the time-schedules. Europeans must accept the project and establish the EU negotiating position in a few months so that the Commission is already in a position to negotiate in July. It is true that in reality the preparatory work has been under way since November 2011. Yet the fine-tuning of a true negotiating mandate, agreed in the 27 capitals (28 from 1 July with Croatia), is not easy. Mr De Gucht believes it is necessary for the Commission to have a negotiating mandate before the end of June, and the Presidency of the Council agrees. This will obviously depend on the possibility of reconciling the positions of all the member states in due course.

Some points of difficulty are well known. An example is that according to France, GMOs (genetically modified organisms) are to be hived off from the negotiations a priori. Yet the American trade secretary, Ron Kirk, for his part has stated: “For us, everything is on the negotiating table in all domains, including GMOs and all other files”. In Europe, we answer that the Château, prosecco or champagne denominations for wines cannot be indicated on products across the Atlantic. It is clear that the very objectives of the negotiation are still to be clarified - which is normal before a start is made, but the clarifications have to be made quickly.

The elimination of customs duties, which are already very weak, is secondary. The main part lies in other aspects and in the overall significance - boosting the global role of two old partners who should find the road of a common future again (which would be reassuring for Europe), boosting values that are not only economic, but also environmental, cultural and social - which are sometimes neglected in other parts of the world or which are disappearing in bloody conflicts (or threatening to become so).

Importance of timing. In the context mentioned above, the issue of time schedules is therefore fundamental. The current European Commission expires in autumn 2014 and there is no certainty of Mr De Gucht becoming part of the next one. Nonetheless, a change of negotiator would demand time and could compromise the way the negotiation unfurls. On the American side, in two years' time there will be the mid-term elections, which could have a slowing effect. This is why the negotiations need to be concluded beforehand.

An element against the fashion of pessimism? In the immediate term, we should hope that within the EU the Euro-American project will not be quickly forgotten, but that it will constitute a positive element in a balanced understanding of the European reality, in a disenchanted public opinion. The fast-encroaching fashion of pessimism, supported largely by those who don't want to give up on their privileges (often unjustified privileges), should gradually be replaced by a minimum of serenity and objectivity with regard to progress in European construction. In reality, more and more long-awaited projects are beginning to materialise - like the European patent and the financial transaction tax. Their effects are inevitably slow and gradual, but it should at least be acknowledged that European construction is moving forwards. The agreement with the United States can be placed in this category, where the effects are slow and gradual.

Systematic pessimism is currently Europe's worst enemy.

(FR/transl.fl)

 

Contents

A LOOK BEHIND THE NEWS
INSTITUTIONAL
EXTERNAL ACTION
ECONOMY - FINANCE - BUSINESS
SECTORAL POLICIES
BUSINESS NEWS NO 50
WEEKLY SUPPLEMENT