Since President Obama mentioned it in last year’s State of the Union address, leaders from both the United States and European Union have been stumping in support of a trans-Atlantic free trade pact.
They frame the Transatlantic Trade and Investment Partnership, or TTIP, as a no-brainer: Removing tariffs and recognizing each other’s standards in industries from automotive to agriculture would provide added stimulus for the world’s two largest economies, without all those pesky fiscal concerns, they say.
A deal addressing both tariffs and “behind-the-border” hurdles could boost the EU and U.S. economies by 119 billion euros (about $154 billion) and 95 billion euros (about $123 billion), respectively, according to a report by the European Commission issued in March.
But as the two sides prepare to begin negotiations in July, they will face issues that could slow this promising momentum, like American concerns over EU farm subsidies accounting for about one-third of the 27-member union’s budget, or Europe’s aversion to genetically modified crops from the United States.
As EU leaders have worked to hash out what should be included in formal talks, Atlanta has seen a parade of leaders showing their support for the pact.
During the annual Europe Day celebrations May 9 in Atlanta, Hans-Joachim Otto, parliamentary state secretary for Germany’s economic ministry, focused on trade during his speech at the Commerce Club.
Mr. Otto joined a chorus of supporters, including Irish Consul General Paul Gleeson and United Parcel Service Inc. COO David Abney, in highlighting the benefits of the deal, which he said would grow more vital as the world’s economic balance shifts toward Asia.
The EU’s No. 3 diplomat in Washington, Antonio de Lecea, happened to be in town at the same time to implement a plan to have the EU represented diplomatically by local consulates of its member countries.
His comments in an interview with Global Atlanta presaged those of Mr. Otto, pointing out that the proposed pact is a chance for the world’s two largest and economies to set the rules governing global trade at a time when emerging powers are challenging Western views and multilateral talks like the Doha Round at the World Trade Organization have stalled.
While much of the promotion has been focused on the benefits of crafting and passing the agreement, policy makers should pay attention to the “dark side” of failing to do so, Mr. de Lecea said.
“If we don’t, and we show our differences and our incapacity to agree on (industry standards), then our collective authority in world trade and investment will be compromised,” he said. “Let’s be clear: that may open the way for others to fill the vacuum, and those filling the vacuum have probably less experience and less expertise on those kinds of issues than we have. It’s our choice.”
Also visiting Atlanta last week, a high-level British economic adviser in Washington shared a similar opinion.
“Really we see this as a chance for the EU and U.S. to lead from the front,” said Andrew Staines, acting first secretary for trade and business policy at the U.K. Embassy. “We see this as a once-in-a-generation opportunity that we should move on pretty quickly.”
Mr. Staines said achieving shared standards and reducing barriers are huge potential boons for business that would emerge from the pact.
Cars, for instance, must be tested for safety in both the EU and United States. Removing that hurdle would cut costs and make the industry more competitive on both sides of the Atlantic, he said.
Neither side wants to comb through thousands of pages of regulations to harmonize laws on complex industries like financial services, Mr. Staines said. It’s more about listening to business to uncover common barriers to trade and investment with the goal of reaching a pact that is as comprehensive as realistically possible.
Although British Prime Minister David Cameron said during a White House visit May 13 that he wants “everything on the table,” resistance to a sweeping deal has already emerged.
France wants to exclude cultural industries like TV and radio from the deal, while analysts say that intellectual property – particularly trademarks on products labeled with certain geographic indicators, like champagne – also present looming challenges.
During a March 27 visit to Atlanta, Claudio Bisogniero, Italy‘s ambassador to the United States, said leaving out certain sectors could hamstring the deal.
“If in the beginning people start saying, ‘This is off the table, this is redlined,’ it doesn’t work. Everything needs to be on the table in the beginning,” he told Global Atlanta.
Italy has been a staunch supporter, given that its economy is largely based on the principle of “import, process, export” – adding value through ingenuity, Mr. Bisogniero said.
Still, he was confident that the pact would pass in some form, though perhaps not by ambitious deadline set for the end of 2014.
“It will go through. Maybe 18 months is a bit optimistic. If they can make it, that would be great. We would support it. If it takes a few more months, that’s not the point. The point is to get there,” the ambassador said. “Eight-hundred million well-off people from Europe and the U.S. being able to trade together with no tariff barriers – I think it’s a great thing.”
It’s not just European officials backing the deal. The leaders of the Georgia’s overseas trade offices believe it would make their jobs promoting the state’s exports easier, they told Global Atlanta in filmed interviews during a recent visit.
More trade could bring additional benefits as communities become more outward-looking, said Nils Gerber, trade manager in the state’s Munich, Germany office covering the EU.
“Companies that export become international companies, they have international business partners, they travel and they ultimately become ambassadors of their respective communities and of Georgia,” Mr. Gerber said.