Ambassador Stresses Shared Interests In Promoting EU-US Trade Pact

EU Ambassador to the US, João Vale de Almeida, delivers a talk to students and faculty at Reynolds Journalism Institute in Columbia, Mo. | Fred Broschart / Missouri Business Alert
Ambassador João Vale de Almeida told an audience at the University of Missouri that the U.S. and EU can set the "gold standard" for international economic cooperation. | Fred Broschart/Missouri Business Alert

The European Union’s ambassador to the United States highlighted the U.S. and EU’s common bonds, shared threats and mutual economic interests during a visit to the University of Missouri.

Speaking to a crowd at MU’s Reynolds Journalism Institute on April 2, Ambassador João Vale de Almeida addressed the proposed Transatlantic Trade and Investment Partnership, or TTIP, an agreement currently being negotiated with the stated goal of making trade between the U.S. and EU member countries easier.

According to a release by the European Commission, the treaty would reduce tariffs on both sides of the Atlantic. It also seeks to lower non-tariff barriers to trades by increasing transparency in regulatory rules that can hinder trade between Europe and the U.S.

According to projections by the EU, the U.S. may stand to increase exports to Europe by 23 to 36 percent, depending on which provisions of the proposed treaty are adopted. Another report by the EU states that small and medium sized businesses on both sides of the Atlantic would stand to benefit greatly, since current tariffs and regulatory compliance costs would be reduced, opening a new market to such businesses.

According to another study commissioned by a group that includes the U.K. embassy to the United States, 13 percent of goods and 31 percent of services exported by Missouri in 2012 went to the European Union. Under TTIP, it is estimated that Missouri’s exports to the EU would increase 23.1 percent, creating about 14,000 jobs in the state.

Almeida said the trade pact would provide the U.S. and EU an opportunity to increase trade and economic prosperity not just between themselves, but globally. “We want to establish a free trade area between these two countries and regions,” he said. “If we do so, we will have enormous weight in the world’s economy.”

A pact to bolster foreign policy

Almeida said that the shared values of the U.S. and the EU should be a “gold standard” that other nations would adopt in order to do business with such a massive market.

He also stressed the strategic value of such a partnership, specifically in light of Russia’s recent actions in Ukraine. Almeida conceded that the EU is very dependent on Russian fossil fuels and that the sanctions put on Russia by the U.S. and EU would cause some hardships in Europe. However, he said a trade pact between the U.S. and EU would not only strengthen the economies of both bodies, but would also allow for a more unified voice on matters of politics and national security.

“The EU and the U.S., we basically have the same objectives,” Almeida said. “Energy is today … a tool of foreign policy — energy is a strategic instrument of policy.”

Regulatory differences raise concerns

There are some questions as to whether an agreement such as TTIP would be accepted by people on both sides of the Atlantic.

An internal EU government document leaked to a Danish newspaper said that many Europeans are concerned about how a trade pact with the U.S. may affect regulatory and consumer protection laws in Europe, with many Europeans seeing the pact as an effort to water down and erode Europe’s more stringent consumer, environmental and even social policies.

A report to the European parliament highlighted several areas where there could be significant issues in bringing parity to U.S. and EU regulations. The report points out the differences in the regulation of genetically modified organisms (GMOs) in food supplies, noting that Europe has much more stringent rules about which GMOs may be sold as food. Chemical industries, other food regulations and issues surrounding the aviation sector are other potential stumbling blocks, the report said.

Under the NAFTA treaty, U.S. corporations have sued foreign governments for implementing regulations that interfere with the corporations’ ability to earn profits. Recently, an American energy company sued the government of Canada after the province of Quebec banned hydraulic fracturing.

A free trade agreement between the EU and Canada signed last November does not expressly prohibit corporations from suing governments for damages if it believes regulations are harming its profits. This has spurred fears among many in Europe that a similar agreement with the U.S. will allow American companies to challenge EU member states’ environmental or consumer protection laws, and perhaps even social programs.

EU Trade Commissioner Karel de Gucht said in a February press statement that TTIP’s goal concerning different regulatory models is to eliminate the costs of compliance where standards were compatible, and to help ensure that future regulations on both sides of the Atlantic are designed to complement one another more closely.

“(Europe) will not compromise our levels of protection of consumers, protection of the environment and protection of health because we want to make a deal with the U.S.,” Almeida said. “This should be a race to the top, not a race to the bottom.”

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