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Trade

Trans-Atlantic free-trade tango

After years spent cautiously eyeing each other across the Atlantic, the European Union and the United States appear ready to improve their trade ties. But, a first meeting has revealed how difficult that may be.

Two months after US President Barack Obama announced his intentions to work toward an American free-trade agreement with the European Union, a first session of preliminary talks has taken place. Official negotiations have yet to get underway, and like previous attempts at this ambitious goal, the devil is in the details.

Six years ago, the devil had wings and took the form of a chicken doused in chlorine. That practice (used for disinfecting chickens in the US) was one of the stumbling blocks in negotiations between the EU and the United States on a trans-Atlantic trade agreement - a plan that was strongly lobbied against by agricultural interests at the time.

Today, similar sticking points need to be addressed before the European Parliament and US Congress can draft the text of a new trade agreement.

Agricultural products, genetic technology, the financial sector, medical products and even cultural subsidy policies are among the tough nuts to crack for the two sides.

The French government has even threatened to block the start of negotiations if the interests of its farmers and the cultural industry aren't taken into consideration.

A big chance?

European Union Trade commissioner Karel De Gucht (L) and European Commission President Jose Manuel Barroso give a press conference on a major transatlantic trade initiative on February 13, 2013 at EU Headquarters in Brussels. AFP PHOTO/JOHN THYS (Photo credit should read JOHN THYS/AFP/Getty Images)

For the EU, it's about more than just a free-trade agreement

Unlike previous attempts at an agreement, this time there doesn't appear to be a choice for the trans-Atlantic partners. In fact, it might even be the last good chance for both sides. The world has changed, and time is working against the West, says Charles Mallory from the Aspen Institute.

"In the bigger picture, both Germany and the United States face the problem that their relative power on the world stage is going to decrease because of the increasing economic and political influence of powers such as India, Brazil, and China," Mallory told DW. "We have a strong interest in having a common economic space because it would preserve our influence in the face of this changing world scenario."

Members of the European Parliament took a similar view when they were in Washington recently to meet with their American congressional counterparts for talks about a free trade area. Unlike the negotiations regarding the copyright law agreement, Acta, which was scuttled at the last second by the European Parliament, EU lawmakers, this time around, have been involved in the negotiating process from the beginning.

A vote in the European Parliament was met with 80 percent approval. Christian Ehler, a European Parliamentarian who specializes in US relations, is trying to convince his partners in Congress about the great potential of the project.

"The message we brought is that this is not about a classic trade agreement," he told DW. "It's really about figuring out how much these two powers should either remove or combine regulatory measures. We're not creating just a trade agreement, but also a single market, and that goes much further politically than a trade agreement."

Titel:Hamburg hafen
Schlagworte:hamburg, hafen
Wer hat das Bild gemacht/Fotograf?: HHLA
Wann wurde das Bild gemacht?:
Wo wurde das Bild aufgenommen?:Hamburg
Bildbeschreibung: Bei welcher Gelegenheit / in welcher Situation wurde das Bild aufgenommen? Wer oder was ist auf dem Bild zu sehen? a view from above of the cranes and the containers.

It would take some time until goods flowed freely without any problems

Common market, common interests

Figures published by the European Commission in March have also exuded a certain charm. They are so convincing that there is hardly a politician on either side of the Atlantic who could resist them. A few examples: the investment volume of the US in Europe is three times higher than that of the US in Asia. In the other direction, Europe invests eight times as much in the US as it does in India and China combined. Even if the current growth rates aren't cited in this case, it is a strong argument for more cooperation between the two economic giants.

Common safety standards for motor vehicles, appliances, or electronic devices are meant to boost trade. The same goes for food, whether it's been genetically manipulated, or disinfected with chlorine.

Harmonizing all standards sounds like a big task. It would, perhaps, be wise to first agree to a framework agreement and then work out the details step by step. Some of the most basic reservations of the US don't make the task any easier, either.

"I think a lot of Americans, conservative Americans, are worried that it may be used as a vehicle to introduce a European social agenda into the US market," said Mallory, "somewhat like the second thoughts the British are having right now about the whole social side of the European project."

Lawmakers in Brussels and Washington want negotiations to officially get under way by the middle of this year. That's when it can be determined how strong the political will on both sides of the Atlantic truly is. The length of the negotiations is open, but one to two years seem likely.

One thing, however, is clear: The more the economic players can be convinced of the advantages of a common market, and the higher the growth rates are, the easier it will be to overcome individual interests and resistance. At that point, not even a chicken dunked in chlorine can stand in the way.

DW.DE