EU / US Trade Talks Begin

Talks to create the largest free-trade area in the world began on the 8^th July.  Negotiators from the EU and the USA met to start negotiations on what could be the most important trade deal in many years.  By some estimates the deal would cover around half of total world global output and around 30% of trade. 

Direct tariffs on goods and services between the two blocks are already low (on average less than 3%).  The talks have a more ambitious aim of removing non-tariff barriers – these include different regulatory standards, inspection regimes, and preference for domestic suppliers.  A beneficial side-effect of harmonising rules is that it would create de facto global standards.  Rising economies, such as China, would be more likely to sign-up to the ‘trans-atlantic’ way of doing things. 

It is not going to be an easy task – even the most optimistic assessments think that the talks will take at least two years.  Agriculture will be one of the main sticking points.  It is an area where there are still substantial tariffs, plus large amounts of domestic support.  In addition, there is the whole issue of GMOs, and the protection of Europe’s ‘food’ names’ such as Champagne, Parma Ham and Stilton.  Other contentious areas will be cultural products (France wants to protect its TV and film industry) and US ‘buy-American’ policies.