The 2013/02/20 at 15:26
In mid-February 2012, Barack Obama gave his green light to discussion on a free-trade agreement between his country and the European Union. But even better, this project is expected to mark his second mandate. The reopening of this dossier represents, for the European Union, a long period of persuasion, so much so does the issue divide its 27 Member States. The most liberal of these States, led by Germany, are spearheads of this project that will open businesses up to a gigantic market, given that Europe and the United States alone make up almost one-half of the global GDP.
According to the European Commission, two billion euros’ worth of goods – in other words one-third of global trade – circulate daily between these two regions of the world, sharing over 2,800 billion euros in investments every year.
1.5 points in growth
It goes without saying that this idea, in the works for many a year, is a source of great hopes for numerous businesses. German automobile manufacturers are amongst the first to support the lifting of customs barriers in order for this free-trade area to become a reality. As specified by Matthias Wissmann, President of the VDA (the German Association of the Automotive Industry), one billion euros in customs fees would be saved by the automotive industry alone. On a global level, it is estimated that five billion euros may be saved by US companies, and similar levels by their European counterparts, resulting in 1.5 points in growth on either side of the Atlantic.
For supporters of the project, it is urgent to make this free-trade agrea into a reality at a time when the proportion held by US, Japanese and European businesses in the global economy is tending to shrink in the face of competition from emerging countries and Asia. According to estimates made by the DIHK, the federation of German Chambers of Commerce, this share is expected to decline from the current 56 % to 50 % in 2030.
The DIHK’s President Hans-Heinrich Driftmann believes that European businesses, especially SMEs, can only benefit from this transatlantic free-trade area. “This is not just about lifting customs barriers but the general dynamic resulting from lightening of administrative loads for businesses,” he declares, pointing out that the United States are, following France, the second trade partner of German businesses for an annual volume of 120 billion euros.
Agriculture and food industry
Meanwhile, France is amongst the European countries that are sceptical about the creation of the Transatlantic Free Trade Area. Until now, many French businesses have not shared the enthusiasm of their German counterparts. While the European Commission is to propose a negotiation mandate to Member States, Nicole Bricq – the French Minister for Foreign Trade – is launching a public consultation procedure addressed at businesses and professional federations until 1 March.
Recalling that the United States is France’s number-five partner and the leading foreign investor in France, with 88 billion euros invested giving rise to 450,000 jobs, the Minister reminds that she wishes for “a useful agreement, a source of opportunities for our companies on the American market and a creator of jobs on French soil.” She nevertheless declares that she will be paying attention to see that the agreement respects “our values, our agricultural model and favours the ecological and energy transition”.
For the lifting of customs duties in this free-trade zone will bring many ramifications. Critics of the agreement hasten to point out the gap between European and American norms and standards. The food industry is undoubtedly the sector most affected by divergences, in sanitary norms as well as regulations such as appellations d'origine controlees (appellations of controlled origin). Industry, namely the chemicals sector or automobile manufacturing, are also concerned in terms of CO2 standards. Certain regulations on marketing authorisation for pharmaceutical products or calls for tenders also require standardisation.
The coming negotiations on the translatlantic free-trade zone are likely to be rowdy, with the first of these already scheduled as a side-event of the G8, to take place on 18 June in Great Britain. Defenders of the project are placing their hopes in the EU presidency of Ireland, a country with a liberal trade tradition.