The United States and the European Union met this week for the second round of talks towards creating the world’s biggest free-trade agreement despite protests in Europe over NSA spying and threats to cancel the talks. With economies on both side of the Atlantic struggling and falling behind fast rising countries like China and India, the United States and the European Union believe this partnership will create thousands of jobs and boost growth. The U.S. and Europe account for nearly half of the world’s total economic output and a third of its trade. As David Cameron, U.K. Prime Minister said, “We’re talking about what could be the biggest bilateral trade deal in history, which would have an impact bigger than all the other trade deals put together.” The E.U. and the U.S. are aiming for a free-trade deal by the end of 2014 – a relatively fast timetable, considering the complexity of these international trade talks and the variances in regulation standards of food, drugs, and financial services between the two parties.
There are many positives that could result from this trade deal. For example, both U.S. and European companies hope that this partnership would lead to the implementation of easier product licensing procedures for both sides of the Atlantic. For example, U.S. agricultural companies have been pushing to export more genetically modified crops to Europe, and European companies have been seeking better data protection for consumers involved in business deals with U.S. companies. One area that could lead to a significant gain for both sides is the natural gas sector. With the recent and continually increasing boom of natural gas production in the United States, this free-trade agreement could provide Europe with increased access to cheaper gas from the United States, decreasing European dependence on Russia and the Middle East. On the American side, increased gas exports to Europe could help rebalance the $107 billion trade deficit with the European Union.
While there are many benefits to this partnership, there are concerns from groups on both sides. With the possible elimination of some conflicting regulations between the U.S. and the E.U., consumer groups and non-governmental organizations have expressed worry that removing these regulatory frameworks could allow businesses to sell products that are untested or unsafe. Furthermore, while the possible economic benefits of the trade of natural gas is enticing, several environmental lobby groups have noted their fears that an agreement could lead to an expansion of hydraulic fracturing in Europe. France, which banned this extraction process in 2011, has been one European country that has expressed the most concern over this possible agreement. France’s cultural concerns also have been highly vocalized during the talks. France has asked that movies, television, and developing online media be made a “cultural exception” to the free-trade agreement. This exception would take media off the negotiating table with the goal of protecting Europe’s movie, television and online entertainment sector from the U.S. dominance. There is also fear on the European side, that the trade agreement would leave European governments vulnerable to direct legal attack by American companies regarding environmental and social laws.
It is apparent that there are many complex issues at work in terms of this free-trade partnership. The question is will the benefits outweigh the possible sacrifices? With talks underway for such a large and highly publicized agreement, is this free trade agreement too big to fail? The next round of talks takes place in Washington, D.C. in mid-December.
– Maxine Jacobson is a Senior studying International Relations