On 13 February 2013, it was announced in a joint statement by the presidents of the United States, the European Council and the European Commission that “the internal procedures necessary to launch negotiations on a Transatlantic Trade and Investment Partnership” should be initiated in both the EU and the US. The prospect of an EU–US free-trade agreement (FTA) was described by EC President José Manuel Barroso as “a game-changer”, since it would create “the largest free trade zone in the world”.
President Barroso, in his statement delivered in Brussels, recognised that a major effort and “political will” would be needed “to make [EU and US] rules and regulations compatible”. According to the EC, “aligning rules and technical product standards… currently form the most important barrier to transatlantic trade”. Studies show the additional cost of regulatory differences as “equivalent to a tariff of more than 10% and even 20% for some sectors” (compared to “classic tariffs” of around 4%). For this reason, Trade Commissioner Karel De Gucht, in a speech on the importance of the agreement, identified “regulatory aspects” as “an important part of the agreement”.
According to the International Centre for Trade and Sustainable Development (ICTSD), the US takes the view that FTA negotiations should only be launched if there are clear prospects for swift completion, and has “asked Brussels to pre-emptively remove a series of agricultural barriers, as a sign that the EU has the necessary political will to address some of the tougher topics once the actual negotiations begin”.
According to ICTSD, the EC responded positively in February to two of three requests tabled, by lifting “its ban on imports of live pigs and of beef carcasses cleaned with lactic acid”. ICTSD saw regulatory issues as the “most contentious” part of the pending negotiations, and the BBC reported the US trade representative as saying that “even sensitive issues such as agricultural subsidies” would need to be discussed.
It was recognised in the final report of the joint EU–US High Level Working Group on Jobs and Growth, published on 11 February 2013, that any process of EU–US standards harmonisation would carry implications for the global system of rule-making on product standards.
Given the relatively low levels of tariffs applied on mutual trade between the EU and USA, the greatest effect of any EU–US FTA is likely to lie in the outcome of the process of standards harmonisation, which will form a central part of the negotiations. In some areas this could lead to changes to EU import regulations that ease market access for ACP exports (see Agritrade article ‘ Tightening of Citrus Black Spot controls could pose challenges’, 29 April 2013); in other areas it could complicate matters for ACP exporters.
It would appear important for concerned ACP exporters’ associations to monitor the process of EU–US standards harmonisation once it gets under way, in order to ensure that any changes that could potentially benefit ACP exporters are automatically extended to ACP suppliers. This, for example, could extend to ensuring that any mutual recognition agreements between the EU and the US are extended to third countries that are already approved to export to one of the two parties (either the EU or US). For example, this could be extremely useful in the case of exports of organic products.