Why EU/US Trade Talks are Stumbling

BRUSSELS (AP) -- Talks for a massive free trade deal between the United States and European Union, the world's biggest economies, appear to be on the rocks.

An accord was supposed to breathe new life into global trade, setting a shining example for other countries as they debate whether to knock down barriers to commerce or insulate their home industries.

But EU ministers were deeply pessimistic Friday that the talks for such a pact can be concluded under the current U.S. administration.

Here are some questions and answers about the Trans-Atlantic Trade and Investment Partnership, commonly known as TTIP.



TTIP aims to remove trade barriers between the EU and the U.S. to boost economic growth and employment. It would improve market access by limiting tariffs, ease regulation and set up rules on things like intellectual property rights, customs and sustainable development. A free trade pact would create a market with common standards and regulations across countries that together account for nearly half the global economy. So far it's involved 14 rounds of talks, hundreds of meetings, hours spent on the phones and proposals exchanged, discussed and redrafted. Most of it has been done in secret.

TTIP would have 30 chapters. Proposals for almost all of them are now on the table. It's made up of three main blocks - market access for EU and US companies, cooperation on regulatory issues, and global rules of trade.



TTIP is expected to lower consumer prices and broaden the variety of traded goods and services. It would eliminate customs duties on goods personally imported to Europe from the U.S. or vice-versa. It would ease the cost of trans-Atlantic telecommunications and make it easier for regulatory agencies on both sides to trace data. The European Commission estimates that the pact could boost EU economic output by 119 billion euro ($133 billion) a year and that of the U.S. economy by 95 billion euros ($106 billion). It says that eliminating tariffs alone could add $180 billion to U.S. and EU gross domestic product in five years while boosting exports on both sides by about 17 percent. That could add about 0.5 percent annually to the EU's economic growth and around 0.4 percent to that of the U.S., helping to pay off public debt and bring down unemployment.



Opponents in Europe argue that it would water down EU standards. European consumer groups worry that food in the U.S. is not produced to the same health and environmental standards as in Europe. Europeans also seem more concerned about their privacy and the protection of their personal data, and sanctions can be levied for abuses. Others worry that banned chemicals might find their way onto the shelves of European stores. The EU bans more than 1,300 hazardous chemicals, compared with around a dozen in the U.S. Another sticking point is the arbitration system, known as Investor-State Dispute Settlement, which some say could allow foreign companies to claim compensation from governments, and ultimately tax payers, if the firms believe a government action would harm their investments.



Senior European officials say there is little likelihood of a deal before President Barack Obama leaves office next January --- the deadline set by negotiators in Brussels and Washington. After that, France and Germany hold general elections, and no big movement appears likely before the formation of a new government, sometime around the end of 2017. Austria and France are already calling for TTIP talks to be put on ice until after the U.S. presidential elections, then relaunched with a new name and mandate given the toxic public reaction in Europe so far.

Eric Shimp, a former U.S. diplomat and now policy adviser at the law firm of Alston & Bird in Washington, says that a President Hillary Clinton might mean more movement in the talks. "You could see her seizing TTIP as a means to create jobs at home and solidify U.S. ties to EU in the face of growing Russian provocations," he said. Experts say a President Donald Trump could make the future of the talks more uncertain, as he has focused more on the negatives of global trade.