EU-US free trade agreement discussed
EU Trade Commissioner Karel De Gucht EPA/JEFFREY ARGUEDAS
European Trade Commissioner, Karel De Gucht, discussed with members of the European Parliament's International Trade Committee (INTA) prospects of a transatlantic trade agreement and its possible impact on the EU and the US economies, emphasising the great potential for supporting jobs and growth.
Commissioner De Gucht underlined the importance of EU-US trade relations, pointing out that “more that €1.8 billion of goods are traded every day between the European Union and United States”. He stressed that during the November 2011 EU-US summit a high-level working group on jobs and growth was established. Subsequently, the US Chamber of Commerce called on creation of a tariff-free trade zone across the Atlantic.
“Enhanced compatibility is in economic and political terms the most important challenge for an ambitious transatlantic agreement,” De Gucht said and pointed out that investment regimes between the EU and the US are already open. He emphasised that market access to government procurement should be substantially improved and reminded that both the US and the EU are committed to protection of intellectual property rights.
De Gucht said that the Commission is prepared for future negotiations and while the talks on investment are progressing well, there are serious efforts to advance negotiations on trade and services, paving a way to a comprehensive agreement. Commission obviously opted for a multilateral approach, pushing for the use of GATT agreement, trying to involve large emerging economies to join in.
MEPs welcomed the progress, reminding that the Parliament called on the Commission to pursue an integrated transatlantic market already six years ago. Legislators underlined the commonality of values shared between the US and the EU in terms of democracy, human rights and economy.
However, they also pointed out that the global trade has changed since they originally proposed transatlantic trade approximation, emphasising that the EU and the US need each other even more now. Lawmakers urged the Commission to pick up negotiations and make some tangible progress in the remainder of the year.
It was argued that in the year of presidential election in the US, negotiations on such an important issue are virtually impossible, due to many politically controversial issues which are, from the EU point of view, inherent to such an agreement, including environmental standards and competition.
MEPs expressed their concerns, following the episode with the ACTA agreement, whether the process of negotiations will be clear and transparent. They also questioned how is the free trade agreement with the US going be affected by the existence of the North American Free Trade Agreement (NAFTA) and consequently impact jobs in the EU and help reverse the recession.
Challenges regarding the sensitive food and agrarian sectors were also pointed out, especially in the context of the new reform of the Common Agricultural Policy and vastly differing regulations in the EU and the US in this field. Also, food labelling and genetically modified foods are controversial issues on the two sides of the Atlantic.
Difficulties in trade negotiations regarding the agriculture were prominent in the scope of the WTO and its Doha Development Agenda round of multilateral trade negotiations. The position expressed during the discussion that the only possible solution would be accepting the European standards could prove to be a major obstacle in this area.
Commissioner De Gucht addressed some of the concerns saying that the difference of opinions between believing and not believing in free trade is difficult to reconcile, but that the practice has shown that trade opening always had positive gross effects on both GDP and employment.
He also reassured MEPs that rules of origin of products will be clearly established in the agreement and enforced strictly, preventing negative effects of NAFTA agreement on the EU-US trade.
Prior to the 2008 global financial crisis, the EU exports to the US was rising on average by 7% a year, while the import was growing by 5% on average. However, following the 2009, the volume of trade between the two partners dropped by a fifth. With the transatlantic economies still accounting for some 40% of the global GDP, and with some €500 billion in annual trade, dynamic gains of an EU-US FTA on two economies is estimated at between a third and a half of percent of GDP for the EU and over 1% of GDP for the US.
In absolute numbers, a free trade agreement between the EU and the US could generate additional €60 billion for the EU economy and around €150 billion for the US. new europe on line
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