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Trade talks to help EU focus on the future
Source: Agencies |
February 19, 2013, Tuesday
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FORTHCOMING transatlantic trade talks might offer a fresh incentive for Europe to worry less about protecting past economic gains and focus more on securing sources of future prosperity.
The negotiations, due to start in June, will be tough. Successive attempts to prise open markets over the past 15 years made some progress but ultimately failed. This time round, extensive consultations have convinced officials an agreement can be forged.
One reason is that agriculture, a constant thorn in the side of negotiators, is less of a bilateral bugbear than it was even two years ago thanks to changes in the global market for farm produce, said Fredrik Erixon, director of the European Centre for International Political Economy, a think tank in Brussels.
The world's two largest economies are also anxious to tap into new sources of growth, estimating that by 2027 a comprehensive pact could add 0.5 percent a year to the EU's gross domestic product and 0.4 percent to US output.
Erixon said the European Commission, the EU's executive branch, sees the talks as an opportunity to try to push through some deep-seated changes to improve the 27-country bloc's economic performance.
Governments have shown a greater appetite for reform in response to the global financial crisis, notably in pensions and labor markets. Ben Noteboom, chief executive of Randstad, a global recruitment firm, said Europe had no choice but to keep up the momentum of reform given the challenges it faces from an ageing population and, especially, the hollowing-out of medium-skilled jobs due to technological change and competition from emerging markets.
"As a society we must come up with answers to prevent that from becoming both a social and economic problem," he said. "The question is whether we will do it fast enough. We don't have a lot of time."
The US and the EU are eying a "21st century" agreement that, as well as scrapping tariffs, sweeps away many non-tariff barriers, such as differences in technical standards.
Yet earlier this month, the same EU showed its 20th century face by concluding a budget for 2014-2020 in which farm subsidies still gobble up by far the biggest share of spending.
A similar problem is the EU's reluctance to lower its guard against US biotech food such as genetically modified plants or hormone-fed beef.
Simon Evenett, a professor of international trade at St Gallen University in Switzerland, agreed a way would have to be found to finesse differences over agriculture for Washington and Brussels to grasp what both see as the big prize - designing the next generation of business regulations and inducing the rest of the world, notably China, to sign up.
Richard Baldwin, a professor of international economics in Geneva, said the fear of being excluded from global standard-setting and regulatory harmonization was a key reason why this round of trade talks might succeed.
The negotiations, due to start in June, will be tough. Successive attempts to prise open markets over the past 15 years made some progress but ultimately failed. This time round, extensive consultations have convinced officials an agreement can be forged.
One reason is that agriculture, a constant thorn in the side of negotiators, is less of a bilateral bugbear than it was even two years ago thanks to changes in the global market for farm produce, said Fredrik Erixon, director of the European Centre for International Political Economy, a think tank in Brussels.
The world's two largest economies are also anxious to tap into new sources of growth, estimating that by 2027 a comprehensive pact could add 0.5 percent a year to the EU's gross domestic product and 0.4 percent to US output.
Erixon said the European Commission, the EU's executive branch, sees the talks as an opportunity to try to push through some deep-seated changes to improve the 27-country bloc's economic performance.
Governments have shown a greater appetite for reform in response to the global financial crisis, notably in pensions and labor markets. Ben Noteboom, chief executive of Randstad, a global recruitment firm, said Europe had no choice but to keep up the momentum of reform given the challenges it faces from an ageing population and, especially, the hollowing-out of medium-skilled jobs due to technological change and competition from emerging markets.
"As a society we must come up with answers to prevent that from becoming both a social and economic problem," he said. "The question is whether we will do it fast enough. We don't have a lot of time."
The US and the EU are eying a "21st century" agreement that, as well as scrapping tariffs, sweeps away many non-tariff barriers, such as differences in technical standards.
Yet earlier this month, the same EU showed its 20th century face by concluding a budget for 2014-2020 in which farm subsidies still gobble up by far the biggest share of spending.
A similar problem is the EU's reluctance to lower its guard against US biotech food such as genetically modified plants or hormone-fed beef.
Simon Evenett, a professor of international trade at St Gallen University in Switzerland, agreed a way would have to be found to finesse differences over agriculture for Washington and Brussels to grasp what both see as the big prize - designing the next generation of business regulations and inducing the rest of the world, notably China, to sign up.
Richard Baldwin, a professor of international economics in Geneva, said the fear of being excluded from global standard-setting and regulatory harmonization was a key reason why this round of trade talks might succeed.
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