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