U.S.-EU Free Trade Negotiations: Tale Of Two Pacts

With the first round of negotiations over a proposed U.S. -European Union free trade agreement concluded, direct participants have already cast an expected optimistic spin on the deliberations, much to the skepticism of outside analysts who understand all too well what a feat creating the world’s largest trade zone will entail.

 

The beginning round had U.S. and EU officials producing a framework to guide future discussions of the so-called Transatlantic Trade and Investment Partnership (TTIP).

According to a Voice of America report, U.S. and European Union officials hailed it as productive and potentially “transformative.”

European Commission President Jose Manuel Barroso upped the hype, calling the TTIP talks “a powerful demonstration of our determination to shape an open and rules-based world," according to China’s Xinhua newspaper, which paints a more critical picture.

Despite all the pomp and circumstance, the TTIP negotiations are highly likely to face major gridlock as the talks progress.

The first few rounds are designed for participants to reach agreement upon the least controversial topics first before getting into the more sticky ones such as reducing tariffs and allowing access to certain markets, explained Jeffrey Schott, a Peterson Institute for International Economics senior fellow to Xinhua.

In the finance and transportation infrastructure sectors, European Center for International Political Economy head Hosuk Lee-Makiyama said he foresees a plentitude of future difficulties in terms of coordinating positions of all 27 EU members and all 50 U.S. states.