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| Conflicting Goals Complicate an Effort to Forge a Trans-Atlantic Trade Deal | |
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| PARIS — The leaders of the European Union, mired in recession and battered by increasing opposition from voters, are desperate for political success to promote economic growth. They are pushing for a rapid negotiation of a trade agreement with the United States aimed at expanding commerce and creating jobs. | PARIS — The leaders of the European Union, mired in recession and battered by increasing opposition from voters, are desperate for political success to promote economic growth. They are pushing for a rapid negotiation of a trade agreement with the United States aimed at expanding commerce and creating jobs. |
| But many experts say any such deal faces long odds. | But many experts say any such deal faces long odds. |
| France has already raised objections about its “cultural exception” — limiting the number of Hollywood movies shown there to protect subsidized, domestic movies and television programs — and continued to press the issue ahead of a meeting on Friday of the European Union’s trade ministers. | France has already raised objections about its “cultural exception” — limiting the number of Hollywood movies shown there to protect subsidized, domestic movies and television programs — and continued to press the issue ahead of a meeting on Friday of the European Union’s trade ministers. |
| At the same time, there is a range of other, probably more serious problems, including agricultural disputes over things like genetically modified food and chlorinated chicken and regulatory questions about car safety, pharmaceuticals and financial derivatives. | At the same time, there is a range of other, probably more serious problems, including agricultural disputes over things like genetically modified food and chlorinated chicken and regulatory questions about car safety, pharmaceuticals and financial derivatives. |
| New concerns about widespread American spying on Internet and telephone traffic will make existing disagreements about data privacy, an important issue in Europe, even more fractious. | New concerns about widespread American spying on Internet and telephone traffic will make existing disagreements about data privacy, an important issue in Europe, even more fractious. |
| After initial skepticism from Washington, both sides agreed in March to push for what is known as the Transatlantic Trade and Investment Partnership, or TTIP. David Cameron, the prime minister of Britain, would like to begin the talks formally at the Group of 8 meeting next Monday and Tuesday, if Paris does not block him over its demand to exclude audiovisual services. | After initial skepticism from Washington, both sides agreed in March to push for what is known as the Transatlantic Trade and Investment Partnership, or TTIP. David Cameron, the prime minister of Britain, would like to begin the talks formally at the Group of 8 meeting next Monday and Tuesday, if Paris does not block him over its demand to exclude audiovisual services. |
| Officials say they hope to conclude a deal by November 2014. | Officials say they hope to conclude a deal by November 2014. |
| “Done properly, TTIP is a good thing, but there are deeply entrenched interests on both sides of the Atlantic, and they will always fight harder to keep what they have rather than get something new,” said Douglas J. Elliott, a senior fellow in economics at the Brookings Institution. “There will be small benefits for a lot of people but big losses in certain sectors, and they’ll fight.” | “Done properly, TTIP is a good thing, but there are deeply entrenched interests on both sides of the Atlantic, and they will always fight harder to keep what they have rather than get something new,” said Douglas J. Elliott, a senior fellow in economics at the Brookings Institution. “There will be small benefits for a lot of people but big losses in certain sectors, and they’ll fight.” |
| There is “maybe a 1-in-3 chance TTIP will happen,” Mr. Elliott said. “And 1-in-3 is optimistic, but the desire to get some economic growth may overcome some serious political problems.” | There is “maybe a 1-in-3 chance TTIP will happen,” Mr. Elliott said. “And 1-in-3 is optimistic, but the desire to get some economic growth may overcome some serious political problems.” |
| Simon Tilford, chief economist at the Center for European Reform in London, is more optimistic than Mr. Elliott but sees “a risk the whole thing will get hijacked and there will be so many exemptions and opt-outs that the meaning of the exercise will be limited.” | Simon Tilford, chief economist at the Center for European Reform in London, is more optimistic than Mr. Elliott but sees “a risk the whole thing will get hijacked and there will be so many exemptions and opt-outs that the meaning of the exercise will be limited.” |
| Particularly from the European perspective, the potential deal is considered strategically important, a way of countering the rising influence of China and India in the global economy. And with the essential failure of the Doha round of the World Trade Organization to realize a trade pact, a United States-European Union deal could lay down regulatory markers for the rest of the world. That is one reason Beijing in particular is wary of TTIP and continues to disparage the European Union as a political entity. | Particularly from the European perspective, the potential deal is considered strategically important, a way of countering the rising influence of China and India in the global economy. And with the essential failure of the Doha round of the World Trade Organization to realize a trade pact, a United States-European Union deal could lay down regulatory markers for the rest of the world. That is one reason Beijing in particular is wary of TTIP and continues to disparage the European Union as a political entity. |
| Just last week, when the European Commission decided to put new duties on Chinese solar panels after charges of dumping, China responded harshly. The official People’s Daily wrote that “the change of times and the shifts of power have failed to change the condescending attitude of some Europeans,” adding that while China does not want a trade war, “trade protectionism cannot but trigger a counterattack.” | Just last week, when the European Commission decided to put new duties on Chinese solar panels after charges of dumping, China responded harshly. The official People’s Daily wrote that “the change of times and the shifts of power have failed to change the condescending attitude of some Europeans,” adding that while China does not want a trade war, “trade protectionism cannot but trigger a counterattack.” |
| China threatened an antidumping investigation into European wine, which could restrict imports of an increasingly popular product among China’s affluent city dwellers. | China threatened an antidumping investigation into European wine, which could restrict imports of an increasingly popular product among China’s affluent city dwellers. |
| For a European Union weakened by the euro crisis, the view is taking hold that the best way to compete with Asia’s inevitable growth is to forge a stronger partnership with the United States, which has its own anxieties about Chinese competition. | For a European Union weakened by the euro crisis, the view is taking hold that the best way to compete with Asia’s inevitable growth is to forge a stronger partnership with the United States, which has its own anxieties about Chinese competition. |
| The president of the European Commission, José Manuel Barroso, is pushing for the pact. “I believe that the E.U.-U.S. trade negotiations are a game changer and can be the start of a new era,” he said recently. “They will further intensify the economic relationship between the United States and European Union, two economic giants eager to be as successful in the future as they were in the past.” | The president of the European Commission, José Manuel Barroso, is pushing for the pact. “I believe that the E.U.-U.S. trade negotiations are a game changer and can be the start of a new era,” he said recently. “They will further intensify the economic relationship between the United States and European Union, two economic giants eager to be as successful in the future as they were in the past.” |
| Even as China is rising, the countries of the European Union and the United States still account for more than 40 percent of world gross domestic product and almost a third of global trade. Two-way trade between the United States and the European Union’s 27 member countries reached $646 billion in 2012, higher than American bilateral trade with China. United States two-way trade with France was $72 billion last year; with Britain, $110 billion; and with Germany, $157 billion. | Even as China is rising, the countries of the European Union and the United States still account for more than 40 percent of world gross domestic product and almost a third of global trade. Two-way trade between the United States and the European Union’s 27 member countries reached $646 billion in 2012, higher than American bilateral trade with China. United States two-way trade with France was $72 billion last year; with Britain, $110 billion; and with Germany, $157 billion. |
| United States investment in Europe is three times larger than that in Asia; European Union investment in America is eight times larger than in India and China put together. | United States investment in Europe is three times larger than that in Asia; European Union investment in America is eight times larger than in India and China put together. |
| Secretary of State John F. Kerry put the stakes bluntly in April. “If we agree on the rules of the road about data transmission and privacy,” he said, “if we can bring our regulations regarding safety and other kinds of things together,” then “we will have established a huge number of goods and products being produced according to a set of standards. And others who want to get into that are going to have to raise their game.” | Secretary of State John F. Kerry put the stakes bluntly in April. “If we agree on the rules of the road about data transmission and privacy,” he said, “if we can bring our regulations regarding safety and other kinds of things together,” then “we will have established a huge number of goods and products being produced according to a set of standards. And others who want to get into that are going to have to raise their game.” |
| He noted that the United States was trying to negotiate a similar deal, known as the Trans-Pacific Partnership, with Asian countries and especially with Japan. China is not included in those negotiations, which the Obama administration considers a higher, more immediate priority than the European talks. | He noted that the United States was trying to negotiate a similar deal, known as the Trans-Pacific Partnership, with Asian countries and especially with Japan. China is not included in those negotiations, which the Obama administration considers a higher, more immediate priority than the European talks. |
| Given already low average tariffs (under 3 percent), the main problems are nontariff barriers, things like differing customs and regulatory requirements. The United States and Europe have different auto-safety requirements, for example, and not all American states have the same ones. They differ on how to ensure the safety of chicken — the Europeans do not allow the import of American chicken that has been chlorinated to kill bacteria. They differ on the safety of genetically modified grains and foods. | Given already low average tariffs (under 3 percent), the main problems are nontariff barriers, things like differing customs and regulatory requirements. The United States and Europe have different auto-safety requirements, for example, and not all American states have the same ones. They differ on how to ensure the safety of chicken — the Europeans do not allow the import of American chicken that has been chlorinated to kill bacteria. They differ on the safety of genetically modified grains and foods. |
| In general, said Mr. Elliott of Brookings, European regulators “have a more cautionary approach than Americans, and they have to prove safety rather than disprove arguments about why something is unsafe.” American regulators generally require scientific evidence that something is unsafe; the Europeans are more precautionary. | In general, said Mr. Elliott of Brookings, European regulators “have a more cautionary approach than Americans, and they have to prove safety rather than disprove arguments about why something is unsafe.” American regulators generally require scientific evidence that something is unsafe; the Europeans are more precautionary. |
| Tariffs and agricultural subsidies are monetary figures that can be negotiated. “But safety is qualitative and cultural,” he said. “On both sides we have strong views about how to do things, and we can get very entrenched.” | Tariffs and agricultural subsidies are monetary figures that can be negotiated. “But safety is qualitative and cultural,” he said. “On both sides we have strong views about how to do things, and we can get very entrenched.” |
| Other major issues will include the regulation of derivatives and some other financial products, and whether foreign and multinational banks must operate in America as if they are United States banks. The fight over subsidies to Airbus and Boeing will no doubt come up, and there are questions about whether the Senate will agree to a separate vote on agriculture, as the United States farm lobby wants. | Other major issues will include the regulation of derivatives and some other financial products, and whether foreign and multinational banks must operate in America as if they are United States banks. The fight over subsidies to Airbus and Boeing will no doubt come up, and there are questions about whether the Senate will agree to a separate vote on agriculture, as the United States farm lobby wants. |
| Within Europe, divisions remain over what to put on the table. Belgium appears to be lining up with France in favoring support for homegrown movies and television production in the name of cultural diversity. Hungary and Greece could back Paris as well. | Within Europe, divisions remain over what to put on the table. Belgium appears to be lining up with France in favoring support for homegrown movies and television production in the name of cultural diversity. Hungary and Greece could back Paris as well. |
| A core issue for France and its allies is “control of the digital space and the implications of the evolution of the digital economy for culture,” said a senior European Union diplomat, who spoke on condition of anonymity to avoid disrupting the internal negotiations. “The reality is that the global market is currently dominated by U.S. operators,” citing companies like Google, Apple and Netflix, “and that is why it is such a sensitive issue.” | A core issue for France and its allies is “control of the digital space and the implications of the evolution of the digital economy for culture,” said a senior European Union diplomat, who spoke on condition of anonymity to avoid disrupting the internal negotiations. “The reality is that the global market is currently dominated by U.S. operators,” citing companies like Google, Apple and Netflix, “and that is why it is such a sensitive issue.” |
| But most other trade officials want to widen the scope of the talks to keep as many bargaining chips as possible. They want to give the European Commission a free hand to negotiate with Washington in hopes of opening up protected American sectors like transporting goods along the United States coast and government procurement markets at both federal and state levels. | But most other trade officials want to widen the scope of the talks to keep as many bargaining chips as possible. They want to give the European Commission a free hand to negotiate with Washington in hopes of opening up protected American sectors like transporting goods along the United States coast and government procurement markets at both federal and state levels. |
| Mr. Barroso would like the negotiations to finish before a new European Commission is chosen in late 2014. But a final deal could take years, which undercuts some of the urgent European support, founded on benefits, even if relatively modest, for economic growth and jobs. | Mr. Barroso would like the negotiations to finish before a new European Commission is chosen in late 2014. But a final deal could take years, which undercuts some of the urgent European support, founded on benefits, even if relatively modest, for economic growth and jobs. |
| A senior American official based in Europe said that “the stars were aligned” for a deal because both economies “are struggling for growth.” Still, he said, “U.S. regulators are deeply skeptical.” | A senior American official based in Europe said that “the stars were aligned” for a deal because both economies “are struggling for growth.” Still, he said, “U.S. regulators are deeply skeptical.” |
| Mircea Geoana, former Romanian foreign minister and ambassador to Washington, perhaps put the inside view best. “Strategically, we need it like air, to keep America and Europe together,” he said. “Practically, it’s going to be very difficult.” | Mircea Geoana, former Romanian foreign minister and ambassador to Washington, perhaps put the inside view best. “Strategically, we need it like air, to keep America and Europe together,” he said. “Practically, it’s going to be very difficult.” |
James Kanter contributed reporting from Brussels. | James Kanter contributed reporting from Brussels. |