EU-U.S. Trade Talks Are Languishing Across the Pond

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As Americans weigh the merits of trade deals such as the Trans-Pacific Partnership, Europeans have been engaged in a similarly impassioned debate over whether to enter into a major agreement with the United States.

That deal, known as the Transatlantic Trade and Investment Partnership, has barely made dent in the popular conversation about trade in the United States. But if it were to be completed, it would be one of largest trade agreements in history. Ever since negotiations launched in 2013, the deal has been the subject of intense public scrutiny in European countries such as Germany and France.

Trade analysts, both for and against the accord, agree that political wariness on both sides of the Atlantic will make it difficult to finish TTIP before President Obama leaves office in January.

TTIP made international headlines over the weekend when Sigmar Gabriel, Germany’s economy minister and vice chancellor, said in an interview with German broadcaster ZDF that negotiations had “de facto failed.” Gabriel is the leader of Germany’s center-left Social Democratic Party, which, with some ideological differences, forms part of a governing grand coalition with Chancellor Angela Merkel’s Christian Democratic Union.

“In my opinion, the negotiations with the United States have de facto failed, even though nobody is really admitting it,” Gabriel said, according to a translation from Deutsche Welle. “Nothing is moving.”

Gabriel’s overall assessment of the talks has been contested by officials in Brussels and in Washington. On Monday, White House Press Secretary Josh Earnest said the U.S. doesn’t share Gabriel’s perspective, while acknowledging that it will be difficult to meet the goal of coming to some sort of agreement before Obama leaves office.

“It’s going to require the resolution of some pretty thorny negotiations, but the president and his team are committed to doing that,” Earnest said. “The ongoing assessment is that they’re continuing to work to complete the agreement before the end of the year.”

The TTIP talks, which EU and U.S. officials were hopeful could be wrapped up in the early stages, have been stalled over a number of issues, chief among them differences over regulatory systems and a controversial investment tribunal system. Under the mechanism known as investor-state dispute settlement, or ISDS, foreign companies can take sovereign governments to an international court if they are believed to have violated the terms of the agreement. Europeans resisted ISDS to the point that the European Commission came up with an alternative proposal aimed at assuaging the public’s concerns.

If TTIP were to go through, the deal’s most notable accomplishment would be the harmonization of rules and regulations across the U.S. and the 28 EU member states that proponents say would make it easier for companies to invest on either continent.

Similar to the controversy surrounding the Trans-Pacific Partnership in the United States, Gabriel’s comments underscore that opposition to TTIP has become a popular political issue in European countries.

German voters are scheduled to go to the polls in 2017 for parliamentary elections that could launch Gabriel’s party to power. That might be part of his political calculus in his statements about TTIP, according to some analysts.

“I would put this down mostly to politics and the need to find an issue with the German people,” said Frances Burwell, a TTIP supporter and vice president at the Washington-based Atlantic Council, in an interview. “The concern is that [the argument against TTIP] does work with the German people.”

Burwell said Gabriel’s statement, along with other comments from sundry European heads of government, such as French President François Hollande, “makes it much more difficult for people who want to push forward with TTIP because they’re thinking, ‘Oh, the Germans won’t go with it, the French won’t go with it,’ et cetera.”

“I find that this is the way trade negotiations work… No one is going to sign up and check a box on a chapter until all of them are done,” she added. “That said, it’s going to be a real challenge to get an agreement by the time that the Obama administration leaves office.”

Melinda St. Louis, the international campaigns director at the Global Trade Watch division of Public Citizen, a Washington-based consumer advocacy group that is resistant to the current trade model, said no serious observers believe that TTIP will be concluded before the end of Obama’s administration. She pointed to previous indicators of the deal’s unpopularity in Europe, beyond Hollande’s statements, such as the United Kingdom’s referendum to leave the EU and an anti-TTIP resolution in the parliament of Wallonia, the French-speaking region of Belgium.

“I think all of that must add up to the slowing down of the negotiations,” she said. “It’s certainly not going anywhere fast.”

Hosuk Lee-Makiyama, director of the Brussels-based European Centre for International Political Economy, compared the current status of the talks to a romantic breakup. He said both economies are essentially engaged in a blame game over who ended the talks.

“The European demands, and also ambition, don’t actually match up with what the U.S. wanted in reciprocation,” he said. “Like after a breakup. You kind of go, ‘I never loved her in the first place,’ and you forget that you were the one who asked for a date in the first place.”

 

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