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Germany Backs Broad Mandate For U.S.-EU FTA, But Talks Still Ongoing

Article on Inside US Trade, 18 March 2013 – Germany’s most senior economic official in the United States said late last week that his government will make the case for covering all issues in a mandate for the European Commission to negotiate a U.S.-European Union trade deal.

Talk among EU member states on the details of the mandate are just getting underway in the EU with an informal discussion on March 15, and a more formal session scheduled for next Friday, according to an EU source.

At the same time, the official strongly hinted that a final deal may ultimately exclude some agricultural issues, such as genetically modified organisms (GMOs) and beef raised with artificial growth hormones, both of which are sensitive topics among EU member states.

“Germany is in favor of a broad mandate” that is not limited “unnaturally,” said Peter Fischer, head of the economic section in the German embassy at a March 15 event organized by Georgetown University. He said Germany “will argue the merits of [its] case” with other member states. The commission also favors as broad a mandate as possible because that preserves its flexibility in the negotiations.

But other member states may seek to exclude agriculture entirely from the negotiating mandate, Fischer conceded, while refusing to speculate on any other areas that some member states may seek to exclude. All 27 member states support the talks moving forward, although some may seek to protect their sensitivities in the talks on a mandate.

In the context of discussing potential exclusions from a final deal, Fischer noted that both sides can produce examples where the other does not follow a rigid scientific approach. He was responding to criticism from U.S. stakeholders that EU policy in areas like GMOs or beef hormones does not strictly follow scientific findings.

The German official conceded that consumer behavior is at times driven by cultural preferences that exist regardless of the relevant scientific information. Food issues are “very important” for consumers in a “cultural” sense, he said, hinting that it may be difficult to alter these perceptions in Europe through trade negotiations.

At the same time, Fischer downplayed the economic importance of these narrow food-related issues. From an economic point of view, they are minor compared to overall U.S.-EU trade flows, he said, and the two sides should maintain that perspective. He urged that such exclusions should not be “the spoiler of the gains we have in other areas” of the negotiations.

Fischer also noted that a potential solution to the trade dispute over artificial growth hormones would be to set up a production line in the U.S. for beef that will be raised without them.

Separately, European Council President Herman Van Rompuy on March 15 hinted that the beef issues will be one of the sensitive issues in the U.S.-EU negotiations, which he said the EU was “impatient” to get started. “We must seize the moment,” he told the Brussels forum of the German Marshall Fund, according to a copy of his prepared remarks.