eu-us

The US-EU free trade agreement was one of the G8 summit’s few pieces of good news in a meeting marred by fall outs over what role the richest countries in the world should play in regards to the Syrian conflict. It has already been touted by Obama as the largest bilateral trade deal in history, and to many on both sides of the Atlantic as a means to giving their economies a much needed boost. The deal could also mean the west continuing to set trading standards through a whole range on industries for years to come.

However, only days after European and American officials pledged a comprehensive and far reaching agreement, opposition has reared its head that could reduce the deal from the largest free trade area in history, representing half of the world’s economy, to little more than empty words and broken promises.

Here are just four of a whole plethora of potential road blocks that could steer the FTA down an economic cul-de-sac.

France Being France

Quite typically France was quick off the block to voice its anxieties regarding the free trade agreement. Many in the French delegation at the G8 voiced their concerns instantly, much to the annoyance of several EU officials, who rightly see this as an avenue for greater global influence for Europe and by extension, the EU. French ministers instantly demanded that cultural and audio-visual industries be exempt from such an agreement, sticking rigidly within the compound of their cultural exceptionism.

The fact that the FTA would be with the USA, the supposed antithesis to French culture and language makes this bluster quite predictable. Also, though the exception of audio, visual and cultural commodities might seem small, it instantly buries the idea, proposed by both the US, UK and EU officials, of having an agreement with few, if any exceptions. This instant demand for exceptions in an area that only applies to France weakens Europe’s hand when it comes to bringing down certain trade barriers that the US might themselves be reluctant to dismantle.

These initial moves by the French government clearly unsettled the president of the European Commission, Jose Manuel Barrosso, who spoke out in reference to Hollande and his socialist government, saying “some say they belong to the left, but in fact, they are culturally extremely reactionary,”

He then went on to attack cultural exceptionism itself, arguing the French establishment had “no understanding of the benefits globalization brings, also from a cultural point of view,”

The French minister of foreign trade, Nicole Bricq, has also recently declared that she has “marshalled” 14 other EU members states in opposition to a comprehensive free trade agreement, and it seems the free trade agreement may yet die a death of a thousand tiny cuts if the French governments’ and its mustered alliance of anxiety are allowed to pull the strings on what could be one of the most important agreements the west has made to safeguard its own influence in the face of a increasingly successful Asia.

Farms In Fortresses

There is a long history of trade disputes between the EU and USA in agriculture. For many years the USA banned European beef due to fears of the so called ‘Mad Cow Disease’ affecting its consumers and livestock. Similarly, the EU placed a ban on US beef due to concerns over the use of hormone treatment on the meat, despite several international food organizations declaring the produce was perfectly safe. These disputes highlight the close ties between state and agriculture in both economies and the fact remains that agriculture is still heavily subsidized in both the EU and USA, both building the tariff walls high and deep to protect them from the invasion of cheaper foreign produce.

The problem for US and European diplomats is how can agriculture which both economies have placed and iron ring around, be reconciled and brought together? It will certainly present one of the larger barriers to free trade and could potentially bring the agreement down in flames.

Buy American

The US has always had some fairly stringent federal procurement rules, which have only favoured the US more since the 2008 crash and this betrays the strong buy American bias that prevails through much of US society. Many in the US, especially those involved in the countries few remaining manufacturing industries such as car making, will lament the increased competition from cheaper European alternatives that until the FTA, had been held at bay by crippling import tariffs. Struggling European manufacturers however will be desperate for new markets, and will be keen to push free trade in this area. Its easy to see how these two expectations colliding could lead to gridlock on the negotiating table.

A single issue that bares strong similarities to both economies agricultural policies is the on-going trade war between Boeing and its US state backers, and Airbus and its European backers. Both The EU and the US have taken the other to court on multiple occasions with accusations of illegal subsidies. This again represents a huge difficulty that will need to be overcome if the FTA is to succeed, as does the whole tension between struggling industries looking to protect what they have on one side of the Atlantic, and struggling industries looking to expand into new territory on the other.

Espionage and Emails

Ever since the revelations that the NSA had been using the data collected by some of the world’s largest internet firms, the EU has been pushing for a greater level of protection for people’s private information. The problem is much of Silicon Valley’s prosperity depends on access to such information, and as they represent an increasingly powerful lobby group in the USA, something will have to give for free trade to permeate this economic sphere.

The NSA itself may be cautious of any agreement that increases the protection of private security, as will much of the rest of the US intelligence services, who have already repeatedly warned that access to this information has actively prevented terrorist atrocities on US soil, and security minded US statesmen may well be anxious to be seen as weak on terrorism.

In all then there are several very real barriers to free trade between the EU and US, and it may prove too much for both economies to overcome, and the temptation is there to rely on tradition trade associations for recovery. However, this deal represents a once in a generation chance to set the standards for trade for years to come, and could potentially off set the relative decline of the west in comparison to the rise of Asia. What’s on offer is the rekindling of trade between the worlds two largest economies, bringing the two spheres closer together economically and politically, and even attracting further economies into bed for mutual benefit. We need only set aside our anxieties and take the first step.