EU-U.S. trade deal seems distant dream after early optimism

Tue Jun 16, 2015 5:36am EDT
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By Philip Blenkinsop

BRUSSELS (Reuters) - When U.S. trade chief Michael Froman opened talks in 2013 on an EU-U.S. free trade deal he said he was confident it could be reached on "one tank of gas." Two years later, negotiations have all but stalled.

This was to have been a unique trade deal between open, developed economies whose high wages meant trade unions did not need to fear job-sapping floods of cheap imports.

But as negotiators prepare for their 10th meeting, in Brussels next month, EU officials are complaining that U.S. counterparts are inflexible and the European Parliament is so split on the subject of the deal that it cannot even agree to debate it.

Senior trade officials initially forecast talks could conclude by the end of 2014, but now they appear to be heading for the in-tray of whoever succeeds Froman's boss Barack Obama in 2017.

"The two sides haven't really started negotiating yet. Even if they hit full speed we are looking at something like 2019 or 2020 based on a normal schedule," said Hosuk Lee-Makiyama, director of the European Center for International Political Economy.

Timing is important. The partners envisage an agreement encompassing a third of global trade that would set a standard for others to follow, but their economic influence is gradually waning.

"The window of opportunity for the transatlantic west to set common standards is shrinking because of initiatives by the global south," said Peter van Ham of Dutch think tank the Clingendael Institute, referring to the China-led Asian Infrastructure Investment Bank as an example.

The subject has whipped up ecology, consumer and civil society groups who argue that this is a secretive deal for big corporations that will lower food, environmental and health standards and cut rather than increase jobs.   Continued...

U.S. Trade Representative Michael Froman speaks to reporters after a meeting with Japan's Economics Minister Akira Amari in Tokyo April 19, 2015. REUTERS/Yuya Shino