US business upbeat on prospect of FTA talks
By Brian Beary in Washington | Friday 11 January 2013
The US business sector is voicing growing optimism that talks will soon be launched for an EU-US free trade agreement (FTA). “This is going to start a lot sooner than people think,” Thomas Donohue, president of the US Chamber of Commerce, told a press conference in Washington DC, on 10 January. Donohue was keen to dispel the notion that enthusiasm was greater on the European side for the pact than on the American side, noting that conversations on the issue on both sides of the pond were “coming to a crescendo”. He was especially confident that there would be less resistance from the US trade union movement than there typically has been to FTAs with other countries. The US trade unions have “for a long time pointed to the EU as a place that knows how to deal with labour” issues, he noted, which should make it “very hard” for them to oppose an EU-US FTA.
The main reason why support for an EU-US FTA has grown so strong, Donohue suggested, was that both sides urgently needed to create faster economic growth and more jobs. As a result, while the transatlantic discussions initially focused on doing a goods-only trade agreement, this has since been extended to other areas, in particular regulatory barriers, which he predicted would take up “a good deal” of the negotiations. While this larger agenda would prolong the trade negotiations, Donohue said there was a “high probability” that a deal would be struck in the long term. However, he also flagged up one key precondition for a future agreement to take effect: that the US president’s Trade Promotion Authority (TPA) be renewed. TPA would give to Barack Obama the power to present to Congress an EU-US trade agreement for a simple ‘yes or no’ vote, instead of allowing Congress to vote on individual parts of an accord. Allowed to expire some years ago, the TPA is widely viewed as essential for a trade pact to succeed, as the US’ trade partners will be reluctant to sign up to a deal in the absence of the TPA, fearful Congress will pick it apart. A future EU-US FTA would also need the approval of the European Parliament, which so far has been very enthusiastic about the idea. In general, European public opinion is more receptive to FTAs than the US public where there remains a lingering sentiment that FTAs cause US jobs to be lost, not gained, especially to emerging economies in Asia.
The next step that needs to take place for the talks to be launched is the publication of the final recommendation of the EU-US High-Level Working Group on Jobs and Growth, which the EU and US leaders established in November 2011 to weigh the pros and cons of shooting for a bilateral FTA. The working group’s report had been due by December 2012 but that timetable has slipped and is now scheduled for the end of January. The Irish EU Presidency is very keen to see the talks launched during its tenure, which concludes in June.