Ensure your clients’ interests are represented at the top table as the great trade talk-in looms
The EU and the US now share not only common values, a similar level of development and high standards of labour and environmental protection, but also the opportunity to deepen those ties with an ambitious free trade agreement.
Following president Obama’s State of the Union address, the EU and the US will begin talks on a new free trade agreement, paving the way for what is billed as the biggest trade deal in history, expected to be worth around €455bn (£393bn; $613bn) a year and with the potential to boost both the US and EU economies while creating jobs.
At a time when hopeful political statements are rare, such positive prospects can only be welcomed. However, while a more integrated transatlantic marketplace would undoubtedly benefit companies, the negotiations will not be easy and companies must be aware of the risks.
When it comes to the negotiations “everything is on the table”, said US trade representative Ron Kirk following the announcement. Broad in scope, the talks will not only cover the removal of conventional trade tariffs, but also try to tackle non-tariff measures as obstacles to trade - a much more complicated exercise that could entail either the adoption of new international standards or the mutual recognition of existing ones on either side.
In fact, it is expected that talks will take two years just to iron out regulatory divisions, mainly due to the fact that both sides will want their slice of the pie.
The EU has already highlighted the special needs of the EU farm sector, which exports high-quality produce to the US. Other important EU concerns will relate to aviation, public services, GM foods, animal welfare, environmental and health standards, food safety, cultural diversity, labour and consumer rights, and restrictions on the foreign ownership of US airlines.
Meanwhile, in the US the usual labour objections to free trade agreements, sanitary and phytosanitary regulations, agricultural subsidies and government procurement issues could further complicate things.
Finally, relevant on both sides of the Atlantic, a key area of the negotiations will undoubtedly relate to the further integration of financial services regimes and, more specifically, harmonisation of the regulatory environment in the transatlantic insurance sector.
Issues such as data confidentiality and protection, systemic risk regulation or duplicative regulatory requests should be addressed, building on work initiated in other forums, but this time with added transparency and intensity.
Both parties will now set in motion internal procedures leading to the launch of negotiations this spring.
Considering the highly ambitious agenda and timeline involved, companies must ensure their interests are protected and represented at both national and European levels.
DLA Piper registered European lawyer Aline Doussin assisted with this article