By Kayleigh Lewis - 12th April 2013
An EU-US free trade agreement could be an example to other international trading partners, says Vital Moreira. Kayleigh Lewis reports.
The bilateral economic relationship between the European Union and the United States is already the world’s largest, accounting for 40 per cent of global economic output. According to the commission, more than €1.8bn of goods and services were traded everyday between the two giants in 2011, a total of €702.6bn over the duration of that year, and this figure is increasing annually.
The Parliament Magazine caught up with US and EU trade and economic relations rapporteur Vital Moreira to discuss the implications of a free trade agreement (FTA) between Brussels and Washington. We asked the MEP, who chairs parliament’s international trade committee, whether he felt that an FTA between the two trading partners would spell the end of the WTO rounds. He said that although the Doha rounds “aren’t dead”, they will be “difficult to reanimate” as they have “come to a stalemate”. “We are negotiating a bilateral and ambitious comprehensive trade agreement because the Doha round didn’t deliver,” he added. “But if we achieve this agreement this doesn’t mean that new rounds could not take place; on the contrary, we need a post Doha round.”
Moreira said that divergences between the EU and US are still “very wide” and that the important thing is to close these gaps and make Washington and Brussels’ two systems “compatible”. “One of the options could be harmonisation”, he said, adding that the EU and US “could achieve some creative compromises in order to harmonise what is now different”. But he said the “important thing” is compatibility, highlighting “mutual recognition” as a means to achieve this.
“Regulatory compatibility” was also Moreira’s primary concern when questioned about potential obstacles emerging during the negotiations. “This is definitely the most tricky, most important topic that will need political will, engagement and, of course, mutual concessions,” he said.
Many other issues remain, such as public procurement and investment services, he said, “because we are a very much integrated economy.” However, he added that “many divergences remain”.
On the issue of tariff barriers between the EU and US, Moreira said that although they are already very low – “an average of four per cent” – there are areas where they remain much higher. According to the Portuguese MEP, these areas include textiles, agriculture and sugar. The main aim, he said, should be “zero duty”, and that the only exceptions should be the most sensitive issues. “The real objective should be to achieve 100 per cent zeroing of all the duties.”
Finally, we asked the rapporteur whether he felt that an FTA between the EU and US could lead to further global liberalisation. “We, the union, are committed to an open trade agenda,” he said, adding, “We are believers in the advantages of free and fair trade. That is why when the round proved to be stalled we had this idea to move with ambitious trade negotiations with our most important trading partners, Japan, the United States and so on. Our idea is to lead by example, to show to the others that we can deliver.
“If the two most important economies can come to a comprehensive and ambitious agreement I think it could be a good example for the other trading partners to come to the same conclusions. I think that we should assert our leadership in standard setting and in rule making so that the genuine ideas of opening fair and equitable trade should have the lead.”
Kayleigh Lewis is a journalist for The Parliament Magazine