Will Washington allow Dutch dredgers to dig on US soil? Can Netflix freely fish for customers in Europe, which wants to shield its film and music industries?
Many questions loom as the US and European Union launch groundbreaking free trade talks tomorrow in Washington.
There was last-minute uncertainty whether the first round of talks would be derailed, amid European outrage over allegations of US espionage targeting EU offices in Washington and Brussels.
But there were compelling reasons to proceed with the Transatlantic Trade & Investment Partnership (TTIP) talks, analysts said, especially as Europe grasps for a way out of its economic malaise.
To allay European concerns without threatening negotiations, both sides agreed to hold parallel talks on the spying allegations, which arise from documents leaked by fugitive US intelligence contractor Edward Snowden.
The trade deal offers the prospect of 500,000 to 2mn new jobs, according to Germany’s Bertelsmann Foundation. Just over half of these would be in the US.
It could add €119bn ($154bn) to the EU economy and €95bn to the US economy annually, according to a study by the Centre for Economic Policy Research think tank.
“This is a deficit-free economic stimulus,” said Charles Ries of the Rand Corp, a global think tank.
Before either side can start reaping the benefits of a free trade zone, negotiators have many sensitive issues to settle, affecting agriculture, military contracting, environmental regulations and government purchasing.
“I do believe ... we will see fireworks,” Dutch Trade Minister Lilianne Ploumen joked in Washington in late June, comparing the heat of the talks to the blazing rockets of US Independence Day celebrations on July 4, just days ahead of the talks.
If completed in the targeted two years, the TTIP would be the biggest bilateral trade deal ever negotiated and create the world’s largest free trade area with a combined more than 800mn people and nearly half of global economic output.
The US-EU economic relationship is already the world’s largest, representing 30% of global trade, according to the office of the US Trade Representative. The daily flow of goods and services between the US and EU is about $2.7bn, the European Commission estimated.
The TTIP aims to eliminate much of the existing tariff barriers, which stand at an average of 4%, and, possibly more importantly, to unify regulations and standards between the two markets - so-called non-tariff barriers.
“It is not a question of changing the EU regulatory approach, but making them more compatible to avoid unnecessary duplication and testing,” said an EU source close to the negotiations.
Such streamlining could bring “real substantive savings for business,” but it was crucial that it “in no way puts into risk the level of protection in either the US or the EU,” the source said on condition of anonymity.
Another driving motivation for the talks is consolidating US-EU ties in what Ploumen called “the changing world order” - with China and India emerging as superpowers.
There are fears in emerging economies and even established military and economic allies that a strong deal would mean new walls to market access. Bertelsmann’s research showed that job gains could come at the expense of Canada, Turkey, Japan, Australia, South Korea, Norway and other countries.
But there would be global benefits, too, TTIP advocates argue. Exporters would only have to meet one set of standards, and there would be added impetus for raising standards and adhering to a rules-based system for economic governance in their own countries.
The April manufacturing disaster in Bangladesh, where more than 1,100 people died in a factory collapse, pointed out the desperate need for better standards. Ploumen was confident that the US and EU together can change “this terrible situation” and others like it.
The chances for a bilateral EU-US deal are better than at any time in recent decades, Ries told DPA. Two years of high-level preparations preceded the joint announcement in February that a “groundbreaking” deal was in the works.
At French insistence, the EU has initially excluded the film and music industries from the talks. Daniel Hamilton, director of the Washington-based Centre for Transatlantic Relations at Johns Hopkins University, called it a “tactical mistake on the part of the Europeans.”
“That gives the US a freebie to say, ‘Here’s our issue that can’t be discussed’,” Hamilton told DPA.
For example, the Netherlands is eyeing the 1920 US Jones Act, which prohibits foreign-built or foreign-flagged vessels from intercoastal and river commerce. That excludes from the US market dredging vessels, where Dutch expertise reigns supreme.
“We could say ‘Sorry,’” Hamilton said, using the Jones Act as a trade-off for Europe’s protection of its audiovisual sector.