WASHINGTON: The United States and theEuropean Union opened a third round of trade negotiations Monday in Washington aimed at creating a powerful free-trade bloc to boost their economies and jobs.
US and EU trade officials returned to the US capital, where the talks began in July, to hammer out the Transatlantic Trade andInvestment Partnership, an ambitious agreement to expand trade, investment and regulatory cooperation.
Announced by President Barack Obama and EU leaders last February, the drive is to expand the transatlantic economic relationship, already the world's largest, accounting for nearly half of global economic output.
Both sides see opportunities, beyond their already low tariffs on average, to reduce non-tariff trade barriers in a bid to stimulate new businesses and job growth.
Transatlantic trade and investment currently supports 13 million jobs on both sides of the Atlantic, and the US and the EU are continuing to suffer high unemployment in the wake of the 2008 global financial crisis.
After last month's second round of TTIP talks in Brussels, officials reported progress in discussions on services and investment.
The new five-day round should set the ground for a political stock-taking by EU Trade Commissioner Karel De Gucht and US Trade Representative Michael Froman in early 2014, the EU said.
At stake are a range of issues, from food and aviation safety, to electric car standards and energy.
But among the major challenges facing the working-level teams headed by EU chief negotiator Ignacio Garcia Bercero and his US counterpart, Dan Mullaney, is market access for financial services, with the Europeans in particular pushing for greater harmonization on regulations.
The EU wants "a better framework for regulators to cooperate," said an EU official who spoke recently on condition of anonymity. "It is important that standards (be established)... in as coordinated fashion as possible" but the United States was "not yet persuaded about that."
The US continues to argue that this issue should be addressed outside the trade deal, the official said.
"We will continue to press our case that TTIP is about getting closer regulations, so it does not make sense financial services should be outside". The EU thinks it can be achieved in the TTIP framework "without compromising regulators independence," the person close to the negotiations said.
The official said that negotiators have discussed energy, particularly gas imports, and the impact of hydraulic fracturing at every round so far, with the EU looking to ensure legal certainty with no restrictions on exports from the US to the EU.
The United States currently has a licensing regime for energy exports. The gas produced by the fracking revolution gives the US a potentially huge economic competitive advantage, the official said, insisting there was no reason for it to be reserved for US users.
The EU estimates a TTIP deal would bring annual benefits of 119 billion euros ($164 billion) for the bloc's 28 member states and 500 million people, and only slightly less for the United States.
US and EU leaders have set their sights on completing an agreement by late 2014. A fourth round of negotiations was expected in March, although there has been no official announcement.
The impetus for a deeper US-EU trade relationship comes amid slow progress on a new global trade deal at the World Trade Organization. A modest WTO agreement struck in early December -- the first since the global trade body was founded in 1995 -- was hailed by EU Trade Commissioner Karl De Gucht as saving the WTO from "the darkness of irrelevance."
Brussels and Washington have each engaged in a series of bilateral free trade deals with other countries given the lack of progress on the WTO's Doha development agenda. In October Canada and the EU reached a deal hailed as helping pave the way to the TTIP.
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