New plans for a big European trade deal put President Barack Obama and Rep. Devin Nunes, R-Calif., on the same page, for now.
Obama wants the deal covering trade and investment with the European Union. To get it, he must navigate the House of Representatives’ trade subcommittee chaired by Nunes. What happens next will test the cooperation of two men who, until now, have rarely agreed on anything.
“I’m optimistic at this point,” Nunes said in an interview Wednesday. “This is an area were we can work together in a bipartisan way.”
Obama pleased Nunes and other free-traders Tuesday night when, in the State of the Union speech, he proposed negotiations on what the White House calls a Transatlantic Trade and Investment Partnership with the European Union. The potential pact would eliminate tariffs, cut quotas, streamline regulations and in other ways ease commercial traffic among some of the world’s largest trading partners.
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A new deal would build on what’s already a robust trading relationship between the United States and the 27-member European Union. The United States exported $265 billion worth of goods to European countries last year, while U.S. imports of European goods totaled $380 billion. Transatlantic trade in services is equally abundant.
Some U.S. businesses in particular, like the California almond industry and Midwestern transportation equipment manufacturers, rely heavily on sales to the 500 million European customers.
“President Obama has always believed that a comprehensive agreement with the European Union and the United States could yield significant increases in U.S. exports . . . while supporting additional jobs here in the United States,” outgoing U.S. Trade Representative Ron Kirk told reporters Wednesday.
It also could take longer than some hope, potentially extending beyond Obama’s own time in office. It could force Congress into some contortions by twisting political alignments, and it certainly provides new opportunities for those, like Nunes, in the middle of the action.
A 39-year-old conservative from a farming family, Nunes has represented California’s rural San Joaquin Valley in the House since 2003. He’s often had sharp words for Obama, as in October when he blasted the president’s “dreamy pronouncements” on the economic recovery. He earned a lifetime vote rating of 93 percent from the American Conservative Union in 2011.
But as the new chairman of the trade panel, part of the powerful House Ways and Means Committee, Nunes must work as closely with White House officials as his famously liberal ranking Democratic member, Rep. Charles Rangel of New York. Behind the scenes, Nunes already has been laying a foundation; meeting, for instance, last week at the house of the European Union’s ambassador to the United States.
“We know how to do these (deals),” Nunes said Wednesday. “Now we have to get to work.”
Potentially complicating the task, Congress and the White House let a special “fast track” procedure for handling trade deals expire. Fast track blocks lawmakers from amending the carefully negotiated trade deals and also streamlines congressional voting. Without it, trade advocates believe, no trade pact can get approved on Capitol Hill.
Even with fast track, trade deals can slow down, sometimes because of resistance from Obama’s Democratic Party allies.
Negotiations over the North American Free Trade Agreement linking Canada, the United States and Mexico began in 1986, but the final deal wasn’t signed until late 1992. South Korea Free Trade Agreement negotiations began in early 2006, but the final deal wasn’t done until late 2010.
When the South Korea trade deal finally did pass the House in 2011, a majority of Democrats voted against it.
Kirk told reporters Wednesday that the proposed U.S.-European Union pact would be “a little bit broader” than the free-trade agreements previously inked with individual countries.
“We think we have an historic opportunity to address some of these legacy issues that have frustrated us,” Kirk said, adding that “everything is on the table.”
Negotiators already know the biggest hurdles they will face, Nunes said, including the European Union’s insistence on strictly regulating genetically modified organisms that are commonplace in U.S. agriculture.
Formal negotiations can begin following a 90-day congressional notification period. Officials said Wednesday that they hope to finish negotiations by the end of 2014, a goal that they acknowledge is particularly ambitious.