Hoping to win the largest trade deal in history, the president’s new U.S. trade representative offered negotiators some advice as they launched new trade talks with the European Union this week.
“Be creative, be flexible, and think outside of the box as necessary to make progress,” urged Michael Froman, who was sworn in last month and is charged with brokering an agreement.
But as negotiators prepare to end the first round of talks in Washington on Friday, many consumer groups in the United States and Europe fear their governments will be a little too flexible, rushing to help corporations cash in on billions of dollars in new business.
The biggest test facing negotiators will be getting the two parties to approve similar safety standards, overcoming the longstanding cultural differences separating them.
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If the talks succeed, backers say, it will provide a huge economic boost to both the United States and Europe. But critics warn that it could come at a high price for American and European consumers, endangering laws that control everything from food to household chemicals.
“All signs are they will push for an agreement that locks in the lowest common denominator on both sides of the Atlantic,” said Karen Hansen-Kuhn, international program director at the Institute for Agriculture and Trade Policy, a nonprofit research and advocacy group with offices in Minneapolis and Washington.
Froman, the deal’s biggest cheerleader, said one of his biggest tasks will be getting Americans to understand how trade can produce jobs and raise living standards. He said he wants the United States wants to pursue “the most ambitious, most comprehensive agreement possible,” one that could produce hundreds of billions of dollars of new U.S. exports. And he said he’s confident that it can happen.
“There are longstanding historical differences, and we need to go into this with our eyes wide open,” Froman said in a recent interview. “But for a number of reasons, we think there’s an opportunity now to address some of these issues that have eluded us.”
He cited one overriding reason: Europe remains “very much still in a stagnation period,” with many European leaders now seeing trade as the best way to grow their vast economy.
“There’s a strong degree of political will on both sides to try and get this done,” Froman said. “And that’s going to be necessary to deal with some of these historically difficult issues.”
The oversight of chemicals promises to be a particularly hot topic, with many opponents worried that U.S. negotiators will try to scrap Europe’s more aggressive regulatory system, which American companies call a “trade irritant.”
Called the REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) program, the system requires manufacturers to prove that chemicals are safe. The U.S. system is regarded as much more lax because it grandfathered thousands of chemicals in use before Congress passed the Toxic Substances Control Act in 1976, meaning they’re assumed to be safe.
“The European system is far superior. . . . A lot of stuff under your sink could probably kill you. In Europe, they’re phasing it out,” said Lori Wallach, director of Public Citizen’s Global Trade Watch, a nonprofit consumer group.
William Waren, a trade policy analyst with the environmental group Friend of the Earth, said the issue is sensitive as a growing body of scientific research links exposure to toxic chemicals to rising rates of cancer, learning disabilities, asthma, fertility problems, Alzheimer’s disease and Parkinson’s disease.
The talks on the proposed Transatlantic Trade and Investment Partnership promise to move slowly. They’re not expected to wrap up until the end of next year, at the earliest, and it won’t come as much of a surprise if they’re pushed into 2015. Froman said the substance of the talks will dictate when they end. But he noted that the terms of the current European Commission expire at the end of 2014; he said that will provide “a useful timetable” for negotiators.
As a result, no one expected any big developments during the first five days of negotiations.
Eric Shimp, a former U.S. trade negotiator who’s now a policy adviser on global trade with Alston & Bird, a Washington law firm, called the first round of talks with the 28-member European Union “an elaborate exercise in jockeying for position.”
“Even though it’s the first round, it’s really just the horses being put into the chutes,” he said. “The gates aren’t really open.”
On the European side, the jockeying began last month, with France making the most noise.
First Paris threatened to block the talks until the country won assurance that the negotiations would exclude France’s entertainment and cultural sectors. And then last week, the French government argued for a temporary suspension of the talks in response to reports that the U.S. government had been spying on European countries.
While negotiators spent the bulk of the week meeting privately at the White House Conference Center next to Lafayette Square, they got an earful Wednesday when they opened the doors for three hours of “stakeholder presentations,” meeting with more than 350 people who had registered in advance.
The interest groups presented a long and diverse list of demands, reflecting the deal’s broad scope.
Oceana, a group seeking to protect oceans, wants a pact that ends European fishing subsidies and cracks down on illegal fishing.
The National Association of Manufacturers wants to make sure that an agreement protects trade secrets of companies.
The AFL-CIO wants to protect “Buy America” laws that allow the federal government and states to give preferential treatment to U.S. companies over foreign competition in awarding contracts.
PhRMA, the Pharmaceutical Research and Manufacturers of America, wants to make sure that U.S. drug patents are protected.
And the Sierra Club wants to make sure that environmental laws don’t get overlooked if the United States begins exporting more natural gas.
Some of the toughest issues will involve food standards, with Europeans wary of Americans’ genetically modified products, hormone-injected meat and cleaning methods at processing plants, including the common practice of dipping chicken in chlorine to get rid of contamination.
U.S. officials sought to assuage the concerns.
“Nothing being negotiated would prevent the United States or the EU from regulating in its own citizens’ public interest – in the financial sector, in the health sector, or with regard to safety or the environment or any other regulatory area,” said Andrea Mead, spokeswoman for the Office of the U.S. Trade Representative. “We wouldn’t negotiate this away.”