A US and EU bilateral transatlantic trade deal is moving slowly into view as both sides prepare for the beginning of formal negotiations. The mobilization towards an agreement reflects the changing landscape of global trade. If a deal emerges, it will allow the U.S. and EU more leeway to set the rules of the road for the industries that matter most to them.
The Financial Times reports:
“This month, a working group led by EU trade commissioner Karel De Gucht and US trade representative Ron Kirk is likely to suggest starting formal negotiations.
“The stars are almost aligned,” says Greg Slater, director of global trade policy at Intel, the chipmaker. The US and EU “have the opportunity to try to set the gold standard” in areas such as intellectual property protection, he says, which emerging markets like China and India would then have to respect.”
The deal offers something for both Democrats and Republicans to cheer. Democrats in particular will welcome a trade deal they don’t have to defend to voters as promoting low wage labor and low environmental standards abroad. Nevertheless the deal will be tough to accomplish; lots of entrenched interest groups on both sides of the Atlantic are ready to fight for parochial issues. In both Europe and the U.S. the politics of trade can be tricky.
This potential trade deal is also a further sign of the collapse of the movement toward global free trade. The new round of WTO negotiations is effectively dead, and a major deal between two of the world’s largest economies would be a further signal that bilateral negotiations are once again becoming the norm.
Finally, this deal shows us that the BRICs are not quite as influential as many think. A U.S.-EU trade deal is essentially a way to ignore countries like Brazil and India while crafting rules that will govern some of the high-tech industries and information-based services that play a growing role in US-EU trade. Once those rules are set, the BRICs will be hard pressed to avoid signing onto them later on down the road.