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Article written by Benjamin Fox and published by www.euobserver.com
BRUSSELS – The French government has dismissed as “naive” suggestions that a transatlantic trade deal with the US could substantially benefit the EU economy and take it out of crisis.
Speaking on Thursday (18 April) following a meeting of EU trade ministers to discuss the draft negotiating mandate, French trade minister Nicole Bricq said “it would be naive to think that the discussions, which will be long and difficult … will really save Europe from the current anaemia.”
EU ministers are expected to sign off on the commission’s negotiating mandate in mid-June. The talks are then expected to take up to two years, although trade commissioner Karel de Gucht is hoping to strike a deal in time for next May’s European elections.
Bricq also said that Paris would insist on the exclusion of Europe’s audiovisual sector from the talks.
“The position of France is that we want exclusion from discussion of cultural items. This is non-negotiable. It is not a surprise. I have said it and if we don’t have exclusion, we will have no agreement,” she said.
The French demands – with the traditional focus on cultural issues – indicate the delicate balance EU negotiators will need to strike to broker a deal. Officials and other EU governments are concerned that keeping certain sectors away from talks could encourage the US to draft its own ‘red lines’.
Irish business and employment minister, John Bruton, who chaired the meeting, struck a more optimistic tone. Ministers had made “real progress towards achieving an agreement,” he said.
De Gucht and Mike Froman, International trade advisor to Barack Obama, were also present at Thursday’s talks. Froman’s presence marks the first time that a US government representative has discussed EU-US trade policy directly with trade ministers.
Officials in Brussels have been talking up the Transatlantic Trade and Investment Partnership with the US which they say could be worth as much as 0.5 per cent of EU GDP and create 400,000 jobs.
A recent paper by the Centre for Economic Policy Research (CEPR), a London-based think tank, indicating that a US trade deal could increase EU economic output by up to €119 billion a year, the equivalent of €545 a year for the average family of four.
But failure to go beyond agreement on tariff barriers would lead to economic gains of no more than €23.7 billion, according to the CEPR. Liberalising the services market and public procurement rules would be worth an additional €5.3 billion and €6.4 billion.
When it comes to face-to-face meetings, German Chancellor Angela Merkel and United States President Barack Obama have had a somewhat one-sided relationship so far. The chancellor has been to Washington several times, but Obama has never been to Berlin as president, despite several invitations.
It could finally happen in June. Obama’s advisors are mulling whether the president should visit Berlin during his trip to Europe. There would be two reasons to do so. First, this year marks the 50th anniversary of former President John F. Kennedy’s legendary Berlin speech, in which he proclaimed: “Ich bin ein Berliner.” And negotiations are set to begin this summer over a trans-Atlantic free trade agreement between Europe and the United States, which the president announced two weeks ago.
Industry representatives are already waxing lyrical about the prospect of the free world, with its 800 million consumers, joining forces to form a gigantic trading bloc with common rules. The American Chamber of Commerce in Germany sees the agreement as a promise of more growth, while officials at the Federal Chancellery call it the cheapest way to stimulate the economy. The old industrialized countries intend to confront China’s expanding economic might by creating a shared market of common standards, patents and laws.
But the planned trading union isn’t going to be an overnight success. Europe and the United States face years of painful negotiations, and many critics see the whole thing as a flight of fancy. Consumer advocates, as well as environmental and Internet activists, are preparing to fight the treaty with all means at their disposal. They fear that bad compromises will be made at the expense of consumers in secret negotiations between the European Commission and the Obama administration.
“The treaty cannot fail because of chlorinated chickens this time,” says German Foreign Minister Guido Westerwelle. He is referring to the Europeans’ distaste for US meat products that are disinfected in chlorine baths, products that are currently banned from importation to Europe.
Major Differences Over GM Foods
Contentious issues like this have brought down many a trans-Atlantic agreement. They may sound petty, but elementary questions of consumer and citizen’s rights are at stake. What do we want to eat? How are our personal data treated in the Internet? In recent years, very different traditions have developed in the United States and Europe in this regard, creating considerable potential for conflict. For instance, there are much greater restrictions on the sale of genetically modified food products in Europe, while most Americans have no problem with such products, as long as they are cheap and look good.
The technology is now used by most US farmers, enabling them to grow plants that are resistant to insects and produce higher yields per hectare. Last year, 88 percent of corn, 93 percent of soybeans and 95 percent of beets grown in the United States were from genetically modified seed. “Transparency, freedom of choice and the principle of foresight cannot be sacrificed to the free movement of goods in Europe,” says Christoph Then, managing director of Testbiotech, a non-profit association opposed to genetic engineering.
The American farm lobby has long fought against European trade barriers for genetically modified potatoes and hormone-treated beef. Now the free trade treaty will provide them with considerable leverage for cracking the European front.
In a letter to US Trade Representative Ron Kirk, Max Baucas, a Democrat senator from Montana, outlined what he hopes to achieve in the upcoming negotiations. His list includes EU restrictions on genetically modified grain, the use of hormones in cattle and “unscientific restrictions on the use of safe feed additives like ractopamine in beef and porks,” all positions that are anathema to European consumer advocates.
For example, American farmers use the hormone rBST, developed by the agricultural corporation Monsanto. The drug is intended to increase milk production by up to 20 percent and meat yield by up to 30 percent. But it is also suspected of causing cancer in human beings. In addition, high-performance cows require additional antibiotic treatment, because their mammary glands are more likely to become infected.
European Farmers Fear Competitive Disadvantage
“If American hormone meat reaches Europe, it will have a considerable impact on European producers,” warns Lutz Ribbe, an agricultural expert with the environmental organization Euronatur. Because production is cheaper in the United States, says Ribbe, European farmers are at a clear competitive disadvantage.
Free trade agreements with other countries show how justified the concerns are. In ongoing talks with India, the EU wanted to include a section on “sustainable development” in the agreement, but the Indians refused. Negotiations with Canada also stalled, partly because of disputes over agricultural issues.
In addition to free trade for agricultural products, the Americans want to place intellectual property rights at the center of the upcoming trans-Atlantic poker game. The business interests of Hollywood and Silicon Valley are behind the effort. They produce movies and software that are coveted worldwide but can often be copied easily. To address the problem, the Americans already negotiated a trade agreement with international partners and the EU in recent years, but then the European Parliament thwarted the effort.
The failure of the Anti-Counterfeiting Trade Agreement (ACTA) was the first major victory for an international web public that had organized a major campaign on the Internet and major demonstrations in Warsaw, Berlin and Paris. The activists felt that ACTA would threaten freedom on the Internet.
Jérémie Zimmermann, one of the organizers of the anti-ACTA movement, believes the time will soon come for new protests. The spokesman for the Paris-based organization La Quadrature du Net can prove that old paragraphs from the failed ACTA were inserted into a preliminary version of the proposed Comprehensive Economic and Trade Agreement (CETA), which the European Commission is currently negotiating with the Canadians and whch could serve as a blueprint for the treaty with the Americans.
Rift on Data Protection
“It’s a favorite game of the entertainment industry to hijack free trade agreements for their own purposes,” says Zimmermann. He sees democracy at risk when negotiations concerning the future of all people are conducted behind closed doors. “Millions of citizens can be mobilized if their freedoms are threatened,” he says.
Jan Philipp Albrecht, a Green Party member of the European Parliament, who opposed ACTA from the start, is also pessimistic about the trans-Atlantic free trade deal, unless national parliaments are brought in early on. “Otherwise the free trade agreement will collapse under opposition from ordinary Europeans.”
Albrecht, the European Parliament’s rapporteur for the proposed Data Protection Regulation, sees considerable potential for conflict. While US companies can use their customers’ personal data with almost no restrictions, Europeans are protected by minimum standards. Finding a compromise on this issue is virtually impossible, says Albrecht.
US companies like Facebook and Google see European data privacy as a potential threat to their billions in profits. Indeed, European authorities have just threatened, once again, to penalize Internet giant Google for its treatment of the personal data of European customers.Another option is to exclude contentious issues like agriculture and data protection from the free trade negotiations. But if that happened, there wouldn’t be much of a trade deal left and the whole project would be redundant. Customs duties, for example, are already so low today, at about 3 percent on average, that they play a relatively minor role.
The free trade agreement is “by far our most important project for the future,” says Chancellor Merkel. It appears that not everyone in Europe agrees.
Translated from the German by Christopher Sultan
Article by Maude Barlow*, published by The Hufftington Post, 19 March 2013 – The United States and European Union have taken the free trade plunge.
President Obama announced in February that he will start talks with the EU on a transatlantic trade, investment, and regulatory pact. Last week, the European Commission sent a draft secret mandate to member states on how far they’re willing to go to clinch it. And the usual business lobbies have already begun to celebrate what they hope to be an important (for them) leap forward for corporate globalization.
The Mexican government is allegedly seeking a spot in the transatlantic talks with speculation Canada may join. But for all three NAFTA countries the pact would be a mistake, as Canadians are learning too late.
The groundwork for a U.S.-EU free trade zone can already be found in the four-year-old Canada-EU Comprehensive Economic and Trade Agreement (CETA) negotiations. Like that other big trade deal, the Trans-Pacific Partnership, the CETA hopes to eliminate about 98 per cent of tariffs on most products. But the broader goal is to reduce so-called non-tariff barriers in the form of domestic regulations, public services, government procurement, performance requirements on investment, and intellectual property rights.
In some areas, like public interest regulation, Europe has more to lose from transatlantic free trade than either the U.S. or Canada. Labelling schemes or outright bans on genetically modified organisms, stricter chemicals management policies, and an EU Fuel Quality Directive that will block Canadian exports of carbon-intensive tar sands oil are all targets for deregulation.
U.S. states and municipal governments should be concerned about Europe’s desire to export its procurement model to North America. In the CETA negotiations, Canadian provinces and municipalities have been asked to give up their right to buy locally (or buy Canadian) on public infrastructure projects and large goods or services purchases. Leaked documents suggest they will make this sacrifice in exchange for modest market access gains for Canadian meat products in Europe. Hardly a fair deal for local governments.
The EU investment protection model may also surprise some U.S. observers in how far it goes to protect the profits of foreign multinationals. Since signing NAFTA, Canada and the U.S. have re-written their model investment treaties to try to create more space for legitimate public regulations and policies. It’s debatable whether the reforms are much of an improvement. But an EU deal could wipe out what little policy space they created.
The EU is pushing Canada for far more pro-investor definitions of “fair and equitable treatment” and “standards of treatment.” This will expand opportunities for European firms to challenge non-discriminatory public policies that lower profit margins, even if the objective of the policy is to conserve natural resources, to protect the environment or public health, or for other legitimate purposes. This at a time when Canada is facing about $2.5 billion in NAFTA investor claims from U.S. firms, including one dispute by a U.S. energy company against a moratorium on hydraulic fracturing (or fracking) in Quebec.
U.S. firms frequently use bilateral investment treaties to challenge foreign government measures. But it is likely that Congressional support for these extreme investor rights treaties would vanish if the U.S. were to lose a case at home. A Transatlantic Trade and Investment Partnership agreement (TTIP) that includes an investor protection chapter like the one in the CETA will present far too many opportunities for powerful European multinationals to test that theory.
There are other problems to consider in a U.S.-EU pact. For example, the two largest exporters of brand name drugs could restrict access to cheap medicines globally if intellectual property rights are ramped up for patented pharmaceuticals. Global food security could be equally damaged if agricultural products received the same enhanced protection in the TTIP. The world’s poor cannot afford to pay more for drugs, seeds, or fertilizer.
The voices of those most impacted by these deals, however, are generally not heard in trade negotiations, which happen behind closed doors with no meaningful public participation. The Canada-EU free trade talks are off limits even to Canadian parliamentarians. Still, opposition to the CETA is growing across the country.
More than 80 Canadian municipalities have passed motions expressing concerns about the deal, with half of those asking to be excluded entirely. Provincial governments are wary of intellectual property rules that will increase the cost of public and private drug plans they administer.
Like the CETA, a U.S.-EU trade deal will not be about jobs or sustainable development. It will not look anything like a 21st century trade deal should. The TTIP will be about deregulating and disempowering communities to act in the public interest.
*Maude Barlow is the National Chairperson of the Council of Canadians and chairs the board of Washington-based Food and Water Watch.
Article on Inside US Trade, 19 March 2013 –
Irish Prime Minister Enda Kenny yesterday (March 18) identified multiple areas where he believed the U.S.-EU trade and investment negotiations would face difficulties, but said the talks could still possibly conclude in the next 18 months to two years.
“There will be difficult bridges to cross in the areas of health and safety standards, public procurement and agriculture,” Kenny said at an event hosted by the U.S. Chamber of Commerce. He also identified government policies that promote the audiovisual sector in certain countries, such as France, as a potential problem area, along with information technology. Policies in the audiovisual sector are aimed at promoting cultural diversity.
Kenny, whose country currently holds the rotating council presidency of the European Union, said the draft mandate submitted by the European Commission last week “may not be perfect, but it takes into account some of the little concerns that individual countries at the European level might have.” Separately, an EU source said that the draft mandate says that member states maintain a right to pursue policies that maintain cultural diversity.
He noted that despite those sensitivities that countries seek to protect, “there’s certainly the backing of the vast majority of governments.”
“Yes, you will have difficulties in the agricultural sector, in the audiovisual sector – some countries in Europe have particular areas that they would focus on – but by and large, I have to say, there seems to be a very real understanding that this is going to be part of the future of Europe,” the prime minister said.
Kenny said the focus right now is to work on building approval for the draft mandate submitted by the commission last week, “so those discussions and negotiations can actually start.” He said Ireland in its role as the presidency is focused on ensuring that a final mandate approved by member states will not demand any carveouts upfront.
Kenny said all he wants in a final mandate is “a platform where these discussions can start.” He added that he could “actually see [the talks] being possibly concluded in 18 months to two years.”
Ireland is aiming to obtain a negotiating mandate from the member states by the conclusion of its presidency at the end of June. Kenny did not indicate how likely it would be for the final mandate to be approved by then, but he noted more than once that there was a high level of support for the negotiations among the EU heads of state, who meet under the auspices of the European Council.
“So, by the end of June, hopefully [the mandate is] done, negotiations can start, and if everything went well that could be concluded sometime next year, but then I can’t predict what the nature of, how technical the discussions might get at one part or another,” he said.
He stressed the potential benefits of a trans-Atlantic deal, saying he was “convinced that an ambitious, comprehensive and far-reaching agreement on trade and investment between the EU and the U.S. will not only trigger economic growth in our respective economies, but will also send a strong signal of leadership to other economic powers.”
“I am convinced that if both sides take an open and flexible approach, we will be able to agree on convergence on regulatory issues, effectively setting the standard for world trade,” the prime minister said.
He also pointed to his government’s openness and willingness to work with business, “so if you have a concern or an anxiety or an opportunity that you see, a potential that you want followed through on, you’re talking to the right people.”
Kenny also met today (March 19) with President Obama at the White House, where the two leaders discussed the forthcoming negotiations. After that, they both attended a “Friends of Ireland” luncheon on Capitol Hill with members of Congress.
Kenny said at the Chamber event that he expected the domestic process for launching negotiations in the United States to “happen very quickly.” The Office of the U.S. Trade Representative may send up its formal notification to Congress on its intent to enter into new negotiations with the EU this week.
The two sides are trying to move through their procedural requirements in tandem, which is why it may make sense for USTR to move ahead with its notification this week.
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.