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Exempting Goods From U.S. Deal Opposed by EU Trade Chief

By Brian Wingfield – May 20, 2013 9:03 PM GMT+0200 on Bloomberg

The European Union’s top trade negotiator said he opposes excluding or carving out categories of goods from an agreement now being negotiated that would create the world’s largest trading region.

“I’m against carve-outs because I believe that when you aim at a comprehensive agreement it should be possible to discuss about everything,” Karel De Gucht, trade commissioner for the 27-nation European Union, said today during an interview for “Bloomberg TV’s MoneyMoves with Deirdre Bolton.”

If concluded, a U.S.-EU accord would create a trading area that would account for almost half of the world’s economic output, according to the U.S. Trade Representative’s office. Officials from each side have said they plan to complete negotiations by the end of 2014.

De Gucht in a separate interview said “you would easily lose six months” if the talks aren’t complete by the time the next European Commission takes office in November 2014. “Let’s not speculate about it, because it’s not giving us a lot today,” he said.

Negotiators plan for the bilateral accord to lower tariffs on trade between the partners, which would reduce costs for U.S. exporters including Dow Chemical Co. (DOW) and Boeing Co. (BA) by about $6.4 billion a year, according to a Nov. 2 study from Bloomberg Government. President Barack Obama, EU President Herman Van Rompuy and European Commission President Jose Barroso on Feb. 13 pledged to pursue a trade agreement.

Important Boost

“If we manage to have an agreement, I’m sure that it would give an important boost to our economies, also to the world economy,” De Gucht said. “I think we would be able to establish, in a lot of domains, norms and standards that become the benchmark worldwide.”

The pact would cover so-called 21st century issues including Internet data-flows, financial services and smaller companies’ access to international markets. The transatlantic trading partners in the past have disagreed over issues including farm subsidies, health and safety rules and regulatory standards that pose a challenge to completing the talks within 18 months.

Disagreements over agricultural trade that have weighed on previous bilateral efforts may bog down discussions, said James Grueff, a former negotiator for the U.S. Department of Agriculture.

Issues including health and farm- and food-safety standards “are not going to be resolved between July of this year and December of 2014,” he said said May 17 at Washington International Trade Association event. “There is a certain disconnect” in saying that these issues are open to negotiation and expecting them to be resolved within the next 18 months, he said.

De Gucht said he isn’t daunted by the scope of the talks.

“Whether it’s too big to succeed, I don’t think so,” De Gucht said. “But it’s certainly too big to fail.”

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Chevron calls for strong investor rights chapter in US-EU trade deal; will be able to use CETA to challenge EU policy in meantime

U.S. and EU Agree On Timing Of First Three Negotiating Rounds For This Year

Posted Friday, May 10, 2013

Inside U.S. Trade – 05/10/2013

The United States and European Union have tentatively set the dates for the first three rounds of negotiations for a bilateral trade agreement — starting in the second week of July — as part of their ongoing preparatory work, according to informed sources.

The two sides have agreed to hold the first negotiating round in the week of July 8 in Brussels, followed by a mid-September round and a mid-December round, according to these sources. In a related development, the U.S. will also participate in a July round of the Trans-Pacific Partnership negotiations that may take place from July 15 to 25, sources said.

The timetable for the U.S.-EU talks is based on the assumption that each side can complete its domestic processes necessary to launch negotiations roughly by mid-June, sources said. This would set the stage for the launch of the negotiations shortly after the June 17-18 G-8 leaders summit chaired by British Prime Minister David Cameron. It is unclear at this time whether the launch will be accompanied by a political declaration of U.S. and EU leaders, business sources said.

Cameron has pledged to use the UK G-8 Presidency to help generate growth, jobs and prosperity for the long term by focusing on promoting free trade, tackling tax evasion and encouraging greater transparency and accountability, according to his agenda posted on the official UK G-8 website. He will meet with President Obama in Washington on May 13, when the two leaders will discuss “Syria, trade and economic cooperation, countering terrorism, and priorities for the upcoming G-8 Summit,” according to a May 8 White House press release.

In the U.S., there has been no organized opposition to any of the issues raised by the U.S.-EU deal, sources said. Members of Congress that are aware of the proposed negotiations generally view them positively, they said. However, if the EU sought significant carveouts from the negotiating agenda, it would cause an enormous problem for key members of Congress, sources said.

In a related development, the House Ways and Means trade subcommittee has scheduled a May 16 hearing on the U.S.-EU trade negotiations, according to a May 9 announcement from subcommittee Chairman Devin Nunes (R-CA). In the statement, he referred to the negotiations as “an opportunity for the United States to resolve long-standing regulatory barriers, and, in particular, regulatory barriers not based on sound science that block our agriculture exports.”

The notice does not announce who will appear as witnesses at the hearing.

The hearing falls within the 90-day notification period triggered by the Obama administration’s formal notification of Congress that it intends to enter into the negotiations. The administration notified Congress on March 20, which means the layover period ends after June 20.

EU member state representatives meeting in the Trade Policy Committee (TPC) last week began a discussion on a revised draft of the negotiating mandate provided by the European Commission, according to informed sources. Following the May 3 TPC discussion, Hans Straberg, the European Co-Chair of the TransAtlantic Business Dialogue, said this week he saw nothing to suggest that the EU could not meet its goal of having the mandate approved by a council of trade ministers in mid-June.

At this point, member states are still debating the extent to which the mandate should protect the audiovisual sector from foreign competition in line with existing EU rules. But EU sources said they believe if the EU seeks to carve out audiovisual services, it will lead to efforts by the U.S. to carve out sensitive sectors, such as air services. In that area, the EU is interested in seeking to liberalize the equity caps for foreign investment in U.S. airlines, business sources said.

The French government has exerted major political pressure on the commission to ensure a carveout for the audiovisual sector, but it is not the sole advocate on this issue, one source said.

According to this source, there is no unified front of member states against the French demands. For example, the German government does not yet have a unified position on this issue, though the German Economics Ministry opposes a carveout for the audiovisual sector, he said.

No other issue has gotten quite the degree of political attention from member states as the cultural exception, a U.S. business source said. For example, the German government has raised objections to the Commission’s proposed approach to investor protection, such as minimum standards of treatment (Inside U.S. Trade, April 5). But that opposition seems to have eased off somewhat, though Germany formally still maintains a reservation on this issue, one source said.

Spain’s minister for trade last week said that the coverage of audiovisual services is likely to be the only “serious difficulty” in crafting the final mandate, citing heavy opposition from both the French and Belgian delegations (Inside U.S. Trade, May 3). Sources last week said that there would likely be at least one more draft mandate before a final vote is held.

EU member states will likely approve the mandate unanimously, as opposed to taking a qualified majority vote, business sources said.

Inside U.S. Trade – 05/10/2013, Vol. 31, No. 19