(VOVworld) – The 13th round of negotiations on the Transatlantic Trade and Investment Partnership Agreement towards establishing a free trade area between the US and the EU resumed on April 25 in New York. Although lobbying efforts have been made by both sides, a possible political consensus seems unlikely before President Obama ends his term in January, 2017.
The TTIP is expected to be the world’s largest free trade area with a combined market of 850 million consumers, accounting for half of the global commodity output and services and 30% of the global trade value (approximately 1 trillion USD a year). The TTIP is one way for the US and the West to establish a more solid alliance to deal with any emerging world power. However, differences remain in key issues such as politics, investment, government spending, and services.
Politically, the EU and France will not sign the agreement at any cost. Social and civil organizations in Germany oppose the TTIP, saying it will harm their agricultural sector and environment. On April 23, tens of thousands of people demonstrated against the TTIP in Hanover, a day before President Obama’s arrival in Germany. According to the Bertelsmann Fund, only 17% of Germans believe the TTIP is a good signal, 55% lower from two years ago. Similarly, in the US the number of supporters has reduced from 53% in 2014 to 18%. A referendum on the UK’s EU membership in June will also affect TTIP negotiations politically. Earlier, more than 3.2 million signatures from 23 EU countries have been collected and sent to the European Commission as a European Citizens’ Initiative against the TTIP. But the European Commission did not accept the initiative, saying the initiative falls manifestly outside the framework of the Commission's powers to submit a proposal for a legal act of the Union for the purpose of implementing the Treaties. Half of the surveyed American people said they don’t have sufficient information about the concerned agreements.
Concerning government spending, American law says the government must prioritize American companies in any government purchasing agreement. But the EU has asked the US to use the TTIP to give up this law, which will give European companies equal rights to access markets. In fact, any trade agreement with priority given to foreign partners will have to go through a difficult process to win US congressional approval. German Economic Minister Sigmar Gabriel has warned that the TTIP will fail if the US sticks to its “Made-in-America” initiative.
Services are one of the obstacles to TTIP negotiations. The EU proposes eliminating 200 services from the TTIP but the US denies. The US has rejected the initiative of opening the maritime transportation sector for foreign competitors. Any talk on the agricultural sector will be long and become sensitive. Lobbying groups of both sides have always wanted to protect the domestic market through the application of import tariffs or trade regulations. Moreover, the US and the EU have maintained different viewpoints on a number of issues such as genetically-modified plants or the use of antibiotics and growth hormones in livestock breeding.
With negotiations started in 2013, the TTIP is expected to be the world’s largest FTA if approved by the US and the EU. But if both sides give no concessions, their differences will remain the biggest obstacle to the early signing of the agreement.