The EU and US were due to resume talks yesterday on the world’s largest free-trade accord aiming to make progress despite damaging revelations of US spying on its allies.
This second round of negotiations on the Transatlantic Trade and Investment Partnership (TTIP) was meant to have been held last month, but due to the US government shutdown had to be postponed just as the spy scandal worsened.
Since then the steady flow of charges has sparked bitter recriminations and demands in some EU quarters that the TTIP talks be halted altogether.
An EU official close to the talks conceded “there may be issues of trust” involved, but stressed that Europe would not compromise its personal data protection standards even as it must discuss the wider issue of information transfer.
“The transfer of data ... is a key component of a modern economy,” the official said, but as far as personal data is involved, it can “only be done so in compliance with [EU] legislation on data privacy.”
Personal data protection is a hugely sensitive issue in Europe given its history of brutal dictatorship of the left and right, and there have been longstanding concerns that giant US tech companies see it as more of a commercial commodity than a sacrosanct human right.
US Secretary of State John Kerry last week urged European leaders not to allow the row to disrupt the TTIP talks which would create “one of the most powerful economic forces on the planet.”
A third round of talks is scheduled for Dec. 16 to Dec. 20 in Washington as both sides aim for a final accord by late next year which would cover about 40 percent of global economic output and 50 percent of trade.
The EU estimates a deal would bring annual benefits of 119 billion euros (US$159 billion) for the bloc’s 28 member states and 500 million people, and only slightly less for the US.
However, as important is that it sets the standards for global trade as years of liberalization talks in the WTO look destined to run into the sands.
Both Brussels and Washington have engaged in a whole series of bilateral free-trade deals given the WTO impasse and last month US neighbor Canada and the EU reached a deal hailed as helping pave the way to the TTIP.
This week’s talks cover services, investment, energy and raw materials, but the key objective is how to harmonize regulatory regimes to reduce barriers to trade.
The auto sector is a prime example where standards in such areas as safety and performance could be matched up, the EU official said, adding that regulatory differences can add 20 percent to the cost of a car, much more than current tariffs do.
The aim is not a “one-size fits all” system, the official said, but rather to get each side to recognize the other’s regulations where possible.