EU leaders will be particularly pleased that a summit date has now been fixed as the last scheduled meeting, in Spain in May, was canceled after Obama said in February that he would not be attending, dealing a blow to EU pride.
EU pushing to impose tighter restrictions on hedge funds and private equity groups, as well as creating new regulators for banks and insurance companies, all of which could have repercussions for U.S. firms operating in Europe.
Regulatory DivergencesA particular problem in the U.S. is the relatively low level of implementation and use of international standards set by the international standardization bodies.Other regulatory obstacles for European exporters include a burdensome pharmaceutical approval system, the American Automobile Labeling Act, documentary and labeling requirements for textiles, and sunscreen protection factor labeling. RegistrationThe implementation of the food-related provisions of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, known as the Bioterrorism Act, puts severe burdens on trade in food and feed products to the U.S. Additionally, in response to recent scandals and scares around imports of unsafe food, feed and drinks, the U.S. is currently considering a number of independent proposals on how to tighten import conditions for food and beverages and improve the safety of such imports.SanitaryIn the agricultural area, a number of sanitary and phytosanitary (SPS) issues remain a significant source of difficulty for EU producers. Most problematic in this respect is the trading of animal products. For example, since 1997 the U.S. has had special rules in place on the import of ruminant animals (beef, sheep, goats) and products thereof from all European countries based on concerns about Bovine Spongiform Encephalopathy, commonly termed BSE. Although the EU and U.S. collaborated closely towards the adoption of a global BSE standard in the Global Animal Health Organisation (OIE), and although the U.S. insist that their trading partners, notably in Asia, use this standard to assess the risk of U.S. beef, the U.S. remains unwilling to use these agreed rules for EU products. Other long-standing trade barriers apply to exports of beef, pork and poultry products and are originally motivated by animal health protection. Imposing trade restrictions on products from a region which is affected by disease outbreaks is a quick, administrative process - and rightly so. However, the lifting of these trade restrictions should be equally fast and pragmatic once the disease has been eradicated. In many cases the U.S. administration has used complex and lengthy rulemaking procedures to restore trade, which can take several years longer than the re-acquaintance of an official disease-free status under the global rules of the OIE.SubsidiesThe EU continues to be concerned about the significant direct and indirect government support given to U.S. farmers and industry by means of direct subsidies, protective legislation and tax policies. In June 2008 the US passed the 2008 Farm Act (Food Conservation and Energy Act (FCEA) of 2008). Despite a consensus among WTO Members that farm policies should be reformed in the direction of less trade-distorting forms of support, the 2008 Farm Act went in the opposite direction, just like the 2002 Farm Bill and again reinforced the trade distorting nature of US farm subsidies.
Security-We also welcomed our deepening partnership on a wide range of trans-national security issues that affect the citizens of the European Union and the United States. This partnership is founded on our conviction that respect for fundamental rights and freedoms and joint efforts to strengthen security cooperation are mutually reinforcing. We agreed to work together to tackle new threats to the global networks upon which the security and prosperity of our free societies increasingly depend. Recognising this, as well as the growing challenge of cyber-security and cyber-crime, we established an EU-U.S.Working Group on Cyber-security and Cyber-crime, which will address a number of specific priority areas and will report progress within a year. We welcomed the successful negotiation earlier this year of an agreement on the Terrorist Finance Tracking Programme. We aim to facilitate transatlantic travel for our citizens while pursuing the vital task of maintaining security, and now look forward to making good progress in our forthcoming negotiations on a Passenger Name Record agreement. We welcomed the inclusion of an additional EU Member State in the Visa Waiver Programme earlier this year, and we reaffirmed our desire to complete secure visa-free travel between the United States and the European Union as soon as possible. We will also continue our work towards negotiating a comprehensive agreement on data protection. We are also committed to extending our partnership on countering violent extremism, in particular by sharing research and good practice and by enhancing co-operation on assistance to third countries at risk. In this regard, we aim to deepen our cooperation with Yemen to help it develop its institutions and capabilities to cope with the challenges it faces, including violent extremism.Jobs- We underlined our conviction that we have not yet fully tapped the potential of transatlantic commerce to boost our growth and generate jobs on both sides of the Atlantic in the coming years, and to strengthen our economies for the competitive challenges of the future. We agreed that the most effective way to achieve these aims is to promote innovation, streamline regulation, and eliminate barriers to trade and investment, bringing benefits to business, workers, and consumers in both markets. We recognised the central role of the Transatlantic Economic Council (TEC) in achieving these objectives, as well as facilitating coordinated approaches to other markets on such issues. We tasked the TEC to develop a transatlantic agenda to stimulate growth and create jobs in key emerging sectors and technologies. We have also asked the TEC to identify ways to improve transatlantic consultation before regulators and agencies develop regulation in economically promising new technologies and sectors, to share best practices, and to develop joint principles with the aim of promoting maximum compatibility of regulations and the freest possible transatlantic flow of ideas, products, and services. We expect the TEC to report on progress in these areas in 2011. In addition, and in order to boost the agenda of green jobs and growth, we tasked the EU-U.S. Energy Council to enhance cooperation on the development and deployment of clean energy technologies. We also tasked it to report by June 2011 on what it has done to accelerate exchanges of information and scientific personnel, to form alliances among our premier energy technology research bodies, and to facilitate participation by qualified researchers in each other’s energy research. We encouraged the EU-U.S. Energy Council to continue to promote energy security by fostering transparent and efficient energy markets, including the diversification of supply sources and routes.Development and Aid- We reaffirmed our commitment to collaboration and coordinated action on development, recognizing that our goals and objectives are aligned as never before. We pledged to continue and strengthen cooperation on food security, climate change and the Millennium Development Goals, including health. As the world’s two leading donors of development assistance, we must maximize the effectiveness and impact of our aid and avoid duplication of effort. We therefore tasked the EU-U.S. Dialogue on Development to produce a work plan for improved in-country cooperation on aid effectiveness with a focus on division of labour, transparency, and accountability, and to begin implementation in a number of mutually agreed countries under partner country leadership, ahead of the Fourth High Level Forum on Aid Effectiveness in November 2011.
Proposal 1A study was carried out by the European Commission at the request of the European Parliament and released in December 2009. It identified the most important Non-Tariff Measures (NTMs) that affect trade between the EU and the US, and estimates their economic impact. Main findings of the study are:It starts from the potential NTM reductions identified in the study, adds economy-wide NTM reductions and other cost-reducing measures to that, such as opening public procurement markets and aligning IPR related measures, and lets these effects work their way throughout the entire economy. This results in cheaper imports, higher economic efficiency and increased incomes far beyond the original 23 sectors covered in the study, as well as in stimulated investments and increased wages. The study shows that the economy-wide effects are much larger than specific sector NTM reduction effects. As a result, the overall economic outcomes can not just be explained on the basis of (sector-specific) trade and NTM patterns.Cons:Agreement based on the removal of tariffs, since the trade costs of NTMs are shown to be significantly higher than the already low MFN tariffs in both the EU and US.
Jodi Dobinsky<br />EU-US Lisbon Summit<br />
Background<br />EU-US relations have been on a somewhat bumpy ride in recent years with disagreements over issues ranging from the Iraq war to the Kyoto climate treaty and the International Criminal Court.<br />With the election of Barack Obama as US president, the EU thought EU-US relations would take a different turn. But a recent series of events have shaken EU-US relations even further.<br />Brussels was disappointed when the US administration announced reform of its banking system, unilaterally undercutting discussions within the G20 Financial Stability Board on coordinating regulation on financial services.<br />To make matters worse, Obama decided not to attend the annual EU-US summit in Madrid in May as he had more urgent matters to deal with at home. <br />Convergence seems weak on issues related to combating terrorism. In February, the European Parliament rejected the SWIFT agreement on banking data transfers to the US.<br />http://euractiv.com/en/foreign-affairs/eu-us-iron-out-differences-november-summit-news-496924<br />
Background, cont.<br />November 20, 2010 with European Commission President José Manuel DurãoBarroso and European Council President Herman Van Rompuy. <br />In October 2008, at the peak of the financial crisis, world financial leaders agreed to take “exceptional action” to stabilize the global financial system.<br />The United States and major EU countries went on to cut interest rates, provide financial assistance to major banks, and stimulate their economies with public funds. These actions not only averted a more severe downturn, but also demonstrated the capacity for trans-Atlantic cooperation under duress, economists say.<br />“The point of a convoy is to get all the ships in the flotilla to their destinations safely, and our economies are not yet fully out of the dangerous open waters,” - Adam Posen of the Peterson Institute and Jean Pisani-Ferry of the Brussels-based Bruegel research group<br />The U.S.-EU “convoy” should at a minimum coordinate a few key objectives, including not intervening to depreciate their currencies and planning “exit strategies” from fiscal stimulus plans in the medium term.<br />
EU27 trade in goods with USA(in millions of euro)<br />“Put simply, we are each other’s closest partners. Neither Europe nor the United States can confront the challenges of our time without the other. These summits are thus an opportunity to deepen our cooperation even further and to ensure that NATO — the most successful alliance in human history — remains as relevant in this century as it was in the last. That is why we have a comprehensive agenda at Lisbon.”- Obama<br />“We are united in our effort to protect our people and promote global security by combating terrorism and preventing the proliferation of weapons of mass destruction,” read the White House release. “Together we advance the ideals of democracy and human rights that are essential in free societies.” <br />EU-US Relation<br />http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/10/174&format=HTML&aged=0&language=EN&guiLanguage=en<br />
Some of the Issues Discussed<br />Internet privacy<br />Genetically modified food products<br />Financial regulation<br />Boeing and Airbus<br />The most critical area for EU-U.S. economic coordination is the longstanding issue of China’s undervaluation of its currency, according to Bergsten. <br />
Joint Statement<br />Today we focused our discussions on three key areas of cooperation that are of vital interest to our citizens: first, how to ensure strong, balanced and sustainable economic growth and how to create jobs, including in new, emerging fields; second, how to meet global challenges such as climate change and international development; and third, how to strengthen the security of our citizens.<br />Economy<br />Contribution the European Union and the United States can make to securing a sustainable and balanced recovery<br />Fiscal consolidation<br />Creating jobs through structural and financial market reform. <br />Reject protectionism <br />We reiterated our strong commitment to direct our negotiators to engage in across-the-board negotiations to promptly bring the Doha Development Agenda to a successful, ambitious, comprehensive and balanced conclusion. <br />We also agreed to coordinate efforts to encourage emerging economies to assume responsibilities and adopt policies commensurate with their growing economic strength and role in areas such as trade, protection of intellectual property, regulation, and investment policy.<br />Global Security<br />Terrorism, Israel and Palestine, Sudan<br />Energy Security<br />Climate Change<br />Copenhagen <br />reduce greenhouse gas emissions. <br />Cancun conference<br />mitigation, <br />transparency, <br />finance, <br />adaptation,<br />Technology<br />Forests<br />Emissions reduction by all major economies<br />Development and Aid<br />
Obama’s Statement<br />First, we agreed to take a series of steps to increase trade and investment, which already amounts to a $4.4 trillion relationship and supports millions of jobs on both sides of the Atlantic. <br />We directed our Transatlantic Economic Council to focus on streamlining regulations, encouraging innovation, eliminating barriers that hamper trade and investment. And building on the progress of the G20 summit in Seoul, we reaffirmed the need for currencies that are market driven and for countries with large surpluses to boost domestic demand.<br />Second, we reviewed our close security cooperation. <br />We saw, with the recent security alerts in Europe as well as the plot that was disrupted to detonate explosives in cargo flights, that we have to work every day to keep our citizens safe, and we will continue to do so.<br />Finally, we’re coordinating on a series of global issues. <br />With regard to climate change, we directed our U.S.-EU Energy Council to find ways to bring clean energy technologies to market faster, and we’re standing by our Copenhagen commitments to reduce emissions as we work towards Cancun.<br />
Proposals<br />Proposal One<br />Non-Tariff Measures in EU-US Trade and Investment<br />For the EU, removing all actionable NTMs would translate into an increase in GDP (€122billion per year) and exports (+2.1%). <br />EU Benefits<br />Motor vehicles<br />Chemicals<br />Pharmaceuticals<br />Food<br />Electrical machinery<br />For the US, benefits from removing actionable NTMs are estimated at €41 billion per year for GDP and 6.1% for exports. <br />US Benefits<br />Electrical machinery<br />Chemicals<br />Pharmaceuticals<br />Financial services<br />Insurance sectors<br />The US gains more in exports and the EU more in income.<br />Cons:<br />The study weakens the argument for a Transatlantic Free Trade <br />Addressing regulatory issues instead of cutting tariffs in EU-US trade relations.<br />Proposal Two<br />Lower Tariffs on goods traded between the US and EU<br />Pros<br />Ease trade between EU and US<br />Cons<br />Loss of income<br />http://trade.ec.europa.eu/doclib/docs/2009/december/tradoc_145612.pdf<br />
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