Exclusive: EU wants to exclude utilities from U.S. trade talks

Tue May 21, 2013 10:48am EDT
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By Ethan Bilby

BRUSSELS (Reuters) - The European Union wants to exclude much of the utility sector from a prospective EU-U.S. free trade agreement in order to protect government controlled infrastructure, the latest draft of the EU's mandate for the negotiations showed on Tuesday.

Unlike in the United States, many national European electricity grids and power generators are state controlled, and governments fear that a deal supporting the free flow of U.S. companies and money into the sector would erode their influence over assets seen as vital to national infrastructure.

"The high quality of the EU's public utilities should be preserved," said the draft, seen by Reuters, which sought in particular to exclude "services supplied in exercise of government authorities."

An EU official familiar with the documents said the document's language was intended to ensure member states were able to regulate utilities and maintain their ability to control investment in these sectors.

Another EU source confirmed this, saying the idea was to prevent member states from having to open access to investment in their electrical grid or water supply.

EU trade chief Karel De Gucht and British Prime Minister David Cameron last week separately called for EU member states not to introduce exclusions and carve-outs into the 27-member bloc's negotiating mandate.

The latest draft follows talks with member states after the European Commission proposed a negotiating mandate in March.

The United States and the European Union aim to start negotiating a transatlantic free trade pact by the end of June. The talks are expected to take two years, and would embrace half of world economic output and a third of all trade.   Continued...