Negotiators working toward a sweeping free trade agreement between the U.S. and EU should stay fixed on the big picture and avoid letting lobbying groups hijack the process, Germany‘s consul general for the Southeast said Sept. 25.
“If there is not strong political leadership on both sides of the Atlantic, these interests tend to carry the day,” Christoph Sander said during a briefing on the proposed Trans-Atlantic Trade and Investment Partnership at the Gwinnett Chamber of Commerce.
The deal faces many potential sticking points as it goes into the second round of negotiations in October.
France already lobbied the EU for a “cultural exception” to ensure that its lucrative film and music industries aren’t covered in the present negotiations. Potential spats over issues like genetically modified crops, hormone-treated meat and automotive safety standards loom large.
Mr. Sander said both sides should keep the broader benefits of the pact in view even as they get down to its nitty-gritty details.
While tariff reductions will provide real value, most of the pact’s impact would come from the removal of non-tariff barriers, such as regulations that require auto makers to crash test their cars in both the EU and U.S. markets. Mutual recognition of standards and reduced regulation would significantly reduce costs for companies.
Mr. Sander admitted this would be a difficult pill to swallow on both sides. The U.S. government, for instance, will likely find it hard to scale down its so-called “Buy American” provisions for government procurement contracts.
But if the deal is to avoid the same problems as previous ill-fated efforts to better integrate trans-Atlantic trade ties, there should be a concerted push by leaders to keep the bigger picture in view, he said.
A study released Sept. 24 estimated that 740,000 jobs would be created in the U.S. if the pact is implemented as it currently stands. Georgia would get nearly 25,000 of those jobs, and the state’s exports to the EU (already a $12 billion-plus relationship including goods and services) would grow by 31.5 percent.
Manufacturers should begin notifying their legislative representatives, especially the senators who would be called upon to ratify a deal, about how much it could mean to their business, Mr. Sander said.
This is especially important in the South, which now has a lot “more than cotton and peanuts,” Mr. Sander said. The region is seeing strong growth in new factories, including from European companies that send products and components across the Atlantic. Alabama, South Carolina and Tennessee have Mercedes-Benz, BMW and Volkswagen plants, respectively.
“Not everyone on the political level in this region has fully understood what what renaissance of manufacturing everyone is talking about means for the Southeast,” Mr. Sander said.
This topic was in full view during Mr. Sander’s visit to the groundbreaking of the $600 million Airbus factory in Mobile, Ala., where he took the opportunity to talk to Republican U.S. Sen. Jefferson Sessions.
Mr. Sander added that Alabama and Tennessee legislators have hinted that their efforts to land an Audi factory failed in part because Mexico had a free trade agreement with the EU that allowed tariff-free exports of Mexican-made cars back to Europe.
The German ambassador has discussed TTIP with Georgia’s senators in Washington, Mr. Sander told Global Atlanta.
A seasoned diplomat involved in a variety of trade negotiations, Mr. Sander said to expect the second round of talks to reach a “crisis scenario” because negotiators will come out with their “maximum positions.” Only time will tell how many concessions each side will eventually make.
Read more about the supposed benefits of the pact: Study: EU Trade Deal Could Mean 25,000 Georgia Jobs