BRUSSELS — President Barack Obama and the top trade official for the European Union sought to rally support Tuesday for a landmark trans-Atlantic free trade deal, saying it would benefit a wide variety of exporters and offer a significant boost to growth.
Karel De Gucht, the E.U. trade commissioner, said one of the biggest beneficiaries of a trade deal with the United States would be automobile manufacturers like BMW that have long rankled at tariffs.
Mr. De Gucht was shoring up support for a mandate to negotiate on behalf of E.U. member states — like Germany, home to a powerful auto sector — and whose governments still must agree to let him lead the talks. He called on the bloc to “now quickly decide to open negotiations so work can begin with the United States before the summer break.”
Mr. De Gucht also sought to assuage France, where there is widespread skepticism about the benefits of free trade, by suggesting that Paris would not have to dismantle quotas and subsidies designed to promote French films and other cultural products.
His comments came as Mr. Obama spoke in Washington, signaling the challenges that lay ahead, indicating that “we’re going to need the help of industry and labor” to get a deal done.
“One of the things that we’ve also been trying to do during the course of this process is to make sure that it’s not just the Xeroxes and the Dow Chemicals that are benefiting from this,” Mr. Obama said, “although we want our Fortune 100 companies to be selling as much as possible.”
“We actually think that there’s room for small and medium-size businesses to export directly — not just supplying large businesses, but also to break open and enter into these markets,” Mr. Obama told the President’s Export Council, his main trade advisory committee on international trade, made up of lawmakers and other officials.
Exports of motor vehicles from Europe to the United States could increase 149 percent if a deal removed existing tariffs and harmonized different safety standards, according to a study conducted by the Center for Economic Policy Research in London and released Tuesday by Mr. De Gucht’s office.
“I feel just as safe when I drive a car in the U.S. as I do when I drive in Europe, so we should find ways to align our systems to find ways to cut costs,” Mr. De Gucht said at a news conference.
He also said that product tariffs, currently 4 percent on average, should be dropped to zero, either immediately or over an agreed period of time.
A surge in trans-Atlantic trade would increase the Union’s vehicle manufacturing sector 1.5 percent, according to the study issued by his office. Other sectors in Europe likely to see significant increases in sales included metal products, processed foods, chemicals and transport equipment, the study said.
European auto companies, particularly German ones, want to make it easier to sell cars they now make in the United States in their home markets. An agreement could add hundreds of millions of euros annually to BMW’s revenue, in part by easing restrictions that now add tariffs to the cars the company makes in Spartanburg, South Carolina, but ships back to sell in Germany and other European countries.
Between them, the United States and Europe already account for about half of global economic output and one-third of world trade. Bilateral trade in 2011 amounted to €455 billion, or about $593 billion, with a positive balance for the Union of more than €72 billion, according to Mr. De Gucht’s office. The United States is the bloc’s main export market, buying €264 billion of goods, or about 17 percent of total E.U. exports, according to his office.
But previous attempts to forge a free trade deal have failed.
Government officials and industrialists who support such a pact say it is different this time, partly because Europe is seeking ways to accelerate growth without raising domestic spending in the wake of its sovereign debt crisis, and partly because the United States is eager to set global standards with Europe that giant emerging economies like China would have to follow.
Mr. Obama gave the talks added impetus last month when he pledged to “launch talks on a comprehensive Trans-Atlantic Trade and Investment Partnership with the European Union” during his State of the Union address.
Mr. Obama’s pronouncement at the time met with a frenzy of enthusiasm from large swathes of the business community on both sides of the Atlantic. On Tuesday, he reiterated that he wanted “to lock in” a deal.
But there are huge obstacles, largely because the biggest gains will not come from the relatively easy goal of dropping tariffs but from bulldozing “behind the border” restrictions like customs procedures that create bureaucratic hurdles.
In particular, the Union wants to pry open so-called public procurement markets and scrap “Buy American” clauses that restrict the ability of European companies to sell goods and services to states and cities. The Europeans also have long complained about restrictions on foreign ownership of U.S. airlines.
The Americans are eager to see a reduction in barriers to exports of agricultural goods including produce from genetically modified organisms and cloning, opposed by many Europeans.
The talks also could run into difficulties over European initiatives like privacy restrictions on major online operators like Facebook and Google, and a tax on financial transactions aimed at recouping money from bankers.
Mr. De Gucht said there still should be a “comprehensive agreement” covering a wide variety of sectors, but he also said it was possible to reach a “living agreement with a number of approaches in it for the future that you then develop once the agreement is in place.”
“I’m not saying every topic and every comma should be finally and in a definite way resolved,” he said.
Jack Ewing contributed reporting from Frankfurt and Brian Knowlton contributed reporting from Washington.
Article source: http://www.nytimes.com/2013/03/13/business/global/us-and-europe-seek-backing-for-landmark-trade-pact.html?partner=rss&emc=rss
Speak Your Mind
You must be logged in to post a comment.