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European free trade agreement with the USA is being negotiated

The European Union (EU) is one of the most important trading partners of the USA. And without the United States of America, Germany would have one less decisive export market outside Europe and many German companies would have to do without their most important investment location in the States. What is currently being negotiated and what is the status? Read on now and learn more!

The course of the negotiations so far

The TTIP (Transatlantic Trade and Investment Partnership) negotiations began in 2013 and have been on hold since 2017. Now a replacement is supposed to be found. That is what the German Institute for Economic Development (DIW) suggests. DIW President Marcel Fratzscher says: “We should come to an agreement with the new US government on how we should deal with China. Europe should therefore rely on a new trade agreement with the USA in which we agree on common standards that are then globally binding. ”

The economist criticized the trade agreement between the EU and China, the text of which was published on January 22, 2021. An agreement with China is important, but the Asian country is playing by its own rules, according to Fratzscher. He said the agreement was “not a big hit, you don’t meet on an equal footing, the conditions in the economies are very different”. The DIW President believes that the best strategy for Europe is “to assert one’s own interests in global system competition, in a strong transatlantic partnership”.

What was the focus of the TTIP negotiations?

The main focus of the EU’s most important free trade agreement was on tariffs, trade barriers and the expansion of trade between the EU and the USA. The negotiations and the agreement were intended to open up the markets on both sides of the Atlantic.

Negotiations began in June 2013 under Barack Obama, and have been on hold since the beginning of 2017 under Donald Trump. Since Joe Biden’s tenure began, there has been renewed hope that negotiations will resume because the current President of the United States wants to get the country back on course for Obama. The talks so far have been sharply criticized by non-governmental organizations and have been accompanied by protests.

What were the goals or objectives of the TTIP?

The TTIP negotiations began with the aim of making a contribution to the political shaping of economic globalization. With a transatlantic free trade agreement, the USA and the EU should set standards for progressive trade rules worldwide. Rules and regulations should be designed in such a way that they are more compatible on a long-term basis. Trade and investment are to be simplified on this basis.

In 15 rounds of negotiations so far, the aim has been to dismantle tariffs and other trade barriers on both sides of the Atlantic.

The goals of the negotiations were

  • a greater opening of the US and EU markets,
  • reducing restrictions on commercial services,
  • the improvement of investment security and a level playing field as well as
  • simplifying access to public contracts at all levels of government.

The current status of the negotiations of the free trade agreement

The European Commission agreed a trade agenda with the former US government on July 25, 2018 to address issues of mutual interest. The cooperation covers several areas:

  • the mutual liberalization of trade in industrial goods – with the exception of motor vehicles
  • Measures to facilitate trade in various industries such as services, chemicals, pharmaceuticals, health and soy products
  • closer cooperation in the field of standards
  • strategic partnership in the energy sector

The latter area also includes the goal of increasing imports of liquefied natural gas (LNG) from the USA.

Both sides also agreed on an exchange on reforming the WTO (World Trade Organization) and on joint action against the global challenges posed by unfair trade practices. As long as work on the agenda continued, the EU and US agreed not to take any action that would run counter to the spirit of their agreement.

Following these negotiations, the Council of the EU granted the European Commission two negotiating mandates on April 15, 2019. With the help of these mandates, negotiations can begin with the US on an agreement to eliminate tariffs on industrial products and on conformity assessment.

On December 2, 2020, after the US elections, a joint communication for a new transatlantic agenda was presented by the EU-COM and the European External Action Service (EEAS). Among other things, this identifies areas of trade policy in which EU-US cooperation would be particularly effective. The Euro Commission is already in talks with the US government on this.

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