Terry Stewart of Stewart and Stewart encourages domestic companies and workers that have not formally addressed what they want from liberalized United States-European Union trade and investment rules to act now, because new rules could be in place by the end of 2014 and negotiations leading to them will begin this summer.
“Helping the U.S. identify and understand technical barriers and regulatory hurdles that you face in the EU and approaches that would facilitate trade will be critical in obtaining the maximum benefit for your U.S. operations and minimize potential negative consequence,” said attorney Terry Stewart, managing partner of Stewart and Stewart, an international trade law firm.
“Develop your positions early, communicate with the Administration and with your elected officials, generate the support of your workers and your communities and stay engaged,” Stewart said.
The United States and the European Union are the two largest economies in the world, representing half of the global GDP economic output and 30 percent of all trade. They have a long intertwined history of trade and investment. Transatlantic investment exceeds $3.7 trillion, and trade in goods and services across the Atlantic are roughly $1 trillion annually or $2.7 billion every day.
“Despite our relative size, comparable economic development and importance to each other, our differences have to date made pursuit of a transatlantic free trade agreement unapproachable,” Stewart said, adding that “The recession and limited budgetary options available to both economies along with the rise of economic powers who do not necessarily adhere to the core set of principles that have driven US-EU economic growth in recent decades have led to the developments of this past week.”
Those developments were the release of a US-EU working group’s final report concluding a comprehensive agreement on trade and investment was the best option available. It recommended US and EU leaders initiate negotiations “as soon as possible.” Just 24 hours later, President Obama, in his State of the Union Address, said he would launch talks on a comprehensive transatlantic partnership with the EU.
Stewart believes substantial progress is possible related to market access between the US and EU. He predicts the sticking point likely will be food safety and agricultural issues.
“Better market access will be easiest to achieve although challenges exist,” Stewart said. “The hardest area will be regulatory issues and non-tariff barriers as both economies are highly developed and have entrenched defenders of the status quo, even though agreements could have the greatest benefit to both economies.” Agriculture and import sensitive manufactured goods will present challenges on tariffs. Each economy has sensitive service sectors. For the US it’s maritime and for the EU it’s cultural industries including movies, TV, and music. Both have limitations on access on government procurements.
“If there is one area that will present the greatest likelihood of limited success or delay it is sanitary and phytosanitary issues,” Stewart said. This is also where the private sector can help governments the most with input and by far offers the largest potential to expand trade and create jobs in both the US and EU.