US-EU accord to be trade game-changer: EU envoy

US-EU accord to be trade game-changer: EU envoy

US-EU accord to be trade game-changer: EU envoy

The EU and the US are expected to begin talks on the TTIP, which would cover half the world’s economic output and about a third of global trade, in July and to reach a deal in one to two years.

European Union officials have touted the huge economic potential of a proposed free trade pact with the United States even as they poked fun at its cumbersome name, the Transatlantic Trade and Investment Partnership.

“We’ve launched this strange animal called TTIP (‘tee tip’),” EU Ambassador to the United States João Vale de Almeida said at a reception to mark Europe Day on May 9. “This is a game-changer. As I like to say, this is the mother of all free trade areas.”

The two sides are expected to begin talks on the pact in July and hope to finish in one to two years. If successful, the final agreement would cover half the world’s economic output and about a third of global trade.

The proposed pact “sends a strong signal ... that despite our economic challenges (in the EU and United States), we are all open for business and trade,” EU foreign policy chief Catherine Ashton told the group.

“I was recently in China. (They) were very, very interested in what this meant, not just for us, but also for them,” she said, in an apparent reference to Chinese concerns the agreement could adversely affect their exports.

The United States is already negotiating another free trade agreement called the Trans-Pacific Partnership with 11 countries in the Asia Pacific region, so there is symmetry in the moniker for the proposed U.S.-EU pact.

But Ashton still said it was “bizarrely named ... I call it a free trade agreement. I can’t get my head around TTIP.”

Whatever it is called, negotiations are expected to be tough, with EU lawmakers already backing French demands to exempt cultural and audiovisual services, which would be a big disappointment for U.S. film and television companies.

Members of the U.S. Congress also want the pact to tackle longtime barriers to U.S. farm products, potentially requiring many European countries to overcome their aversion to importing U.S. genetically modified crops.

It will be “a long difficult process of negotiations. We have of course the best negotiators on the European side. But we respect a lot the American negotiators,” Vale de Almeida said to laughter from the crowd.

Last week, President Barack Obama nominated Mike Froman to be the next U.S. Trade Representative, effectively charging his longtime friend and chief international economic affairs adviser with the task of completing the U.S.-EU deal.

Turkey wants to be included

Turkey has been requesting its involvement in the process. The free trade deals between the EU and third parties have enabled these other countries’ goods to enter Turkish markets via Europe with zero duties, yet the decision to provide the same privileges to Turkey is up to the third party.

The Turkish Economy Minister Zafer Çağlayan said leaving Turkey outside of the free trade agreement between the EU and the U.S. creates unfair competition for Turkey,during his meeting with Ireland’s Deputy Prime Minister Eamon Gilmore last month.

However, Turkish Deputy Prime Minister Ali Babacan said the process currently being negotiated between the U.S. and the EU is a historical step that is supported by Turkey, adding that Ankara did not want to be excluded from the deal, during his U.S. visit last month.

As the Customs Union structure grants the U.S. the authority to decide about whether or not to extend favorable trading privileges to Turkey, the current period represents an opportunity to persuade U.S. politicians to realize the bilateral interests at stake.

A similar trade agreement between the U.S. and Turkey would boost the bilateral trade and investment relations between the countries, which have been lower than they should have been. Turkey has exported around $5.6 billion worth of goods to the U.S. while importing $14 billion in 2012 – records over the last two years, according to official figures.