EU-US summit to boost transatlantic trade

The upcoming EU-US summit is to launch a "new transatlantic economic partnership", according to proposals put forward by the German presidency of the EU.

Berlin hopes that the summit, which will take place in Washington on 30 April, will provide a springboard for Chancellor Angela Merkel’s aim of reinvigorating trans-atlantic ties.

Under the German plan, US President George W. Bush and EU leaders would agree to break down non-tariff barriers and improve regulatory convergence in specific sectors, in order to boost trade and investment. They would also sign common declarations on energy and climate change.

Diplomats from both the EU and US have expressed broad support for the proposals. Some EU member states have called for sensitive sectors such as public procurement and intellectual property to be included in the agreement.

A report on barriers to investment and trade published this month by the European Commission stated that current rules were damaging EU business and had "a substantial negative impact on the US economy".

Labelling requirements for textiles and pharmaceutical approval are listed as two examples of areas where manufacturers had to meet different standards.

But the proposal will stop short of calling for a transatlantic free trade agreement (FTA). Merkel had earlier backed such an idea, but it met stiff opposition on both sides of the Atlantic.

In the broader talks on world trade liberalisation the EU and the US are currently at loggerheads over agricultural subsidies, which could also derail talks on a bilateral free trade zone.

"You will never get an agreement on an FTA," said one European trade official.

But James Elles, a UK centre-right MEP and member of the Transatlantic Policy Network, which lobbies for closer EU-US ties, welcomed Merkel’s initiative.

He said, however, that deadlines must be set in order to make regulatory convergence work.

"You cannot do this in one, two or even five years," said Elles, calling on the EU and the US to commit themselves to a deadline of 2015 to reach the goal.

Although efforts are already underway to achieve regulatory convergence and reduce the burden for companies trading across the Atlantic, he said that a new political impetus was needed.

He blamed the slow pace of progress on transatlantic disputes over the Iraq war.

"[There have been] stratospheric political questions between the EU and US, but you cannot continue to struggle in the foothills if you have a mountain to climb."

But some officials are sceptical as to whether the initiative will work, particularly since the EU and the US have different philosophies on regulation, with Brussels putting a stronger emphasis on the environment and consumer protection and Washington taking a free-market approach. "This is all motherhood and apple pie, no one disagrees with it," said one European trade official. "As long as you are just paring back differences it is fine, but at some point you have to adopt one or the other side’s regulations or find new standards."

EU leaders will discuss the proposals when they meet in Brussels on 8-9 March.

The upcoming EU-US summit is to launch a "new transatlantic economic partnership", according to proposals put forward by the German presidency of the EU.

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