Washington (AFP) – The United States and the European Union entered a third round of trade negotiations Monday in Washington aimed at creating a powerful free-trade bloc to boost their economies and jobs.
U.S. and EU trade officials returned to the U.S. capital, where the talks began in July, to hammer out the Transatlantic Trade and Investment Partnership, an ambitious agreement to expand trade, investment and regulatory cooperation.
Announced by President Barack Obama and EU leaders last February, the drive aims to further enhance the current trade relationship, which already averages low tariffs and is the world’s largest, accounting for nearly half of global economic output.
Both sides see opportunities to reduce non-tariff trade barriers in a bid to stimulate new businesses and job growth.
Transatlantic trade and investment currently supports 13 million jobs on both sides of the Atlantic, and the U.S. and the EU are continuing to suffer high unemployment in the wake of the 2008 global financial crisis.
After last month’s second round of TTIP talks in Brussels, officials reported progress in discussions on services and investment.
The new five-day round should set the ground for a political stock-taking by EU Trade Commissioner Karel De Gucht and U.S. Trade Representative Michael Froman in early 2014, the EU said.
At stake are a range of issues, from food and aviation safety, to electric car standards and energy.
Among the major challenges facing the working-level teams — headed by EU chief negotiator Ignacio Garcia Bercero and his U.S. counterpart, Dan Mullaney — is market access for financial services, with the Europeans in particular pushing for greater harmonization on regulations.
The EU wants “a better framework for regulators to cooperate,” said an EU official who spoke recently on condition of anonymity. “It is important that standards (be established)… in as coordinated a fashion as possible” but the United States was “not yet persuaded about that.”
The U.S. continues to argue that this issue should be addressed outside the trade deal, the official said.
“We will continue to press our case that TTIP is about getting closer regulations, so it does not make sense financial services should be outside.” The EU thinks it can be achieved in the TTIP framework “without compromising regulators independence,” the person close to the negotiations said.
The official said that negotiators have discussed energy, particularly gas imports, and the impact of hydraulic fracturing at every round so far, with the EU looking to ensure legal certainty with no restrictions on exports from the U.S. to the EU.
The United States currently has a licensing regime for energy exports. The gas produced by the fracking revolution gives the U.S. a potentially huge economic competitive advantage, the official said, insisting there was no reason for it to be reserved for U.S. users.
The potential inclusion of an investor-state dispute settlement (ISDS) provision in the trade deal has drawn sharp criticism from U.S. and European organizations and unions.
In a letter to Froman and De Gucht on Monday, nearly 200 signatories, including Greenpeace, the International Trade Union Confederation, the Sierra Club, Friends of the Earth and ATTAC, called for negotiators to exclude ISDS, which allows corporations to challenge government policies before private trade tribunals.
“ISDS is a one-way street by which corporations can challenge government policies, but neither governments nor individuals are granted any comparable rights to hold corporations accountable,” they wrote in the letter, obtained by AFP.
“A state-to-state dispute settlement system is more than sufficient to handle investment disputes in TTIP.”
The EU estimates a TTIP deal would bring annual benefits of 119 billion euros ($164 billion) for the bloc’s 28 member states and 500 million people, and only slightly less for the United States.
U.S. and EU leaders have set their sights on completing an agreement by late 2014.