When American and European negotiators sit down this week to
launch talks on a free trade deal between the US and the European
Union, they are moving into uncharted waters - whether the deal
succeeds or fails.
The Transatlantic Trade and Investment Partnership (TTIP) would
be the world's largest free trade deal, far surpassing the North
American Free Trade Agreement (NAFTA) between the US, Mexico, and
It's also ambitious in content. With tariffs already low, this
deal will focus more on business barriers such as safety standards
or inspection procedures. The issues might seem pedestrian, but are
some of the trickiest to negotiate, going to the very heart of the
way people live their lives: the way chicken is cleaned, or the
assumptions people make when they walk into a pharmacy or get into a
A trade deal would deeply integrate US-European relations at a
time of drift, and during a rocky patch, amid friction over American
spying allegations. If it succeeds, some say it would create a more
level playing field with the rise of China and other emerging
markets, as well as reinvigorate other global trade initiatives.
Yet even if it fails - and there are plenty who think that the
obstacles such as agriculture and, most recently, data privacy are
insurmountable - a failure would be pivotal, showing that tariffs
can be dropped but non-tariff barriers, which are often more
cultural in nature, remain stubborn. A failure, says Fredrik Erixon,
the director of the European Center for International Political
Economy (ECIPE) in Brussels, "could lead to a larger standstill in
efforts to address 21st century trade barriers."
Tariffs between the US and EU are already relatively low, but
because of the sheer size of trade between the two - representing
half of global economic output - advocates say it would be a major
booster of growth and jobs, especially in debt-stricken Europe that
has seen record high unemployment at 12.2 percent.
The two already invest nearly $4 trillion in each other's
economies, according to US statistics, which translates into 7
It's the non-tariff barriers, however, that most are watching in
TTIP talks. Today, if a product is made in France, for example, it
goes through the various regulatory hurdles to bring it to the
marketplace; it then has to go through another set of strenuous -
and often redundant - hurdles to reach the US market. Under the
TTIP, both sides could agree to mutually recognize the others'
When it comes to car safety, reducing red tape may be an easy
compromise. But other issues on the table have long vexed
negotiators. That includes French subsidies for its film industry,
European resistance to genetically modified foods (GMOs), or data
privacy laws - especially in the wake of the information released by
former National Security Agency (NSA) contractor Edward Snowden
revealing the US systematically spies on its own citizens, as well
as European institutions.
"One of the sleeper issues in the deal is how to deal with
privacy," says Bruce Stokes, the director of the Global Economic
Attitudes program at the Pew Research Center. Europeans,
particularly Germans, are far more sensitive than Americans when it
comes to data privacy.
"There is a disconnect between Europeans and Americans about this
new digital economy," Mr. Stokes says. And even if the Snowden case
is about government, not industry, it bolsters European assumptions
that Americans don't care about privacy, he says. …