Follow U.S. investment immigration and pay attention to U.S. economic development: It is reported that the European Union may propose to eliminate tariffs on 96% of U.S. goods entering the EU market, but tariffs will still be imposed on some products such as beef and chicken. The picture shows two young girls selecting chicken products in a Belgian supermarket.
From February 17 to 18, U.S. Trade Representative Michael Froman and EU Trade Commissioner Karel De Gucht held closed-door consultations to summarize the progress of the first three rounds of negotiations on the Transatlantic Trade and Investment Partnership (TTIP). A new round of negotiations for the Trans-Pacific Partnership (TPP) was held in Singapore, where chief negotiators from 12 countries, including the United States and Japan, held meetings from the 17th to the 21st, with ministerial meetings scheduled from the 22nd to the 25th.
Analysts believe that through these two negotiations, the U.S. aims to build new WorldWay rules. However, public opinion generally holds that both the TPP and TTIP negotiations will face numerous difficulties and are unlikely to yield results in the short term.
Economic Development Disparities Become the Main Obstacle
The Malaysian Reserve reported on the 17th that due to the persistent so-called "red lines" in the TPP negotiation process, the TPP is still far from completing the signing of an agreement. The article quoted Malaysian Minister of WorldWay and Industry Mustapa Mohamed as saying that these "red lines" are highly sensitive to countries like Malaysia and need to be resolved before negotiations. Analysts stated that the "red lines" referred to by Mustapa are a series of controversial topics, including intellectual property rights.
Liu Ligang, Chief Economist for Greater China at ANZ Bank, said in an interview with our reporter that the TPP negotiation is not an easy task, and it is unlikely that there will be substantial progress within this year. From the TPP negotiations between Southeast Asian countries and the United States, it can be seen that the economic differences between the U.S. and some ASEAN countries are very large, and the focus of their respective interests is not consistent. For some ASEAN countries such as Malaysia, Vietnam, and the Philippines, gaining market access to the United States and reducing anti-dumping duties imposed by the U.S. on their goods are priority goals. The U.S. focus is on high-tech fields such as the automotive industry, information technology, and intellectual property transfer.
Liu Ligang stated that for some Southeast Asian countries, intellectual property protection is closely related to their economic levels, legal mechanisms, and per capita income, and needs to be combined with the protection of their own emerging industries. Therefore, the differences between the U.S. and ASEAN countries in these areas are significant. Coupled with the fact that the TPP agreement ultimately requires approval by the U.S. Congress, and there are currently many voices of opposition and criticism regarding the agreement within the U.S. Congress, these factors cast a shadow over the prospects of the negotiations.
Inconsistent Standards Between the U.S. and Europe in Multiple Fields
Although the U.S.-EU TTIP agreement could bring huge benefits to both sides, European Commission President Barroso pointed out that because the negotiations cover a wide range of areas, including the unification and coordination of market rules and regulatory systems between the two major economies of the EU and the U.S., it is estimated that the negotiations "will not be too easy."
European public opinion is also not optimistic about the TTIP negotiations, believing that inconsistent standards between the U.S. and Europe in many fields will hinder the negotiation process. The United States and the European Union have their own standards in many areas, such as genetically modified foods and the automotive industry, and neither side is willing to lower its existing standards to accommodate the other. This world's largest free trade agreement is unlikely to take shape in the short term.
Daniel Gros, Director of the Centre for European Policy Studies, told our reporter that the biggest contradiction lies in the independent market regulatory agencies and different market rules of the U.S. and the EU. For example, the U.S. Food and Drug Administration cannot directly accept drugs approved by the EU, and vice versa. Similar situations exist in other fields.
In addition, the lack of consensus within the EU also adds variables to the negotiation process, such as France's call for the EU to exclude the cultural sector, including film, music, and media, from the negotiations.
Obama Hopes for "Fast-Track" Authorization
Terence Stewart, Managing Partner of the U.S. law firm Stewart and Stewart, said in an interview with our reporter that the United States has long been the leader of the open trade system, but the consequences of free trade agreements are persistent, massive U.S. trade deficits and job losses. Both the North American Free Trade Agreement and the U.S.-Korea Free Trade Agreement have led to an increase in the U.S. trade deficit. Therefore, all sectors in the United States are highly vigilant about any new trade negotiations.
Stewart stated that from the U.S. perspective, a good trade agreement must be able to resolve some of the core issues leading to the U.S. trade deficit, including constraints on state-owned enterprises, enforcement of transparency obligations, and currency manipulation issues. Judging from the information disclosed, the TPP and TTIP negotiations involve some core issues but do not contain strong provisions, so the U.S. Congress may intervene to exert pressure.
In his State of the Union address at the end of January, U.S. President Obama called on Congress to grant Trade Promotion Authority, also known as "fast-track," to accelerate the negotiation and approval process of trade agreements. Through "fast-track," Congress sets "parameters" for trade agreement negotiations. After the executive branch negotiates and signs a trade agreement, Congress can only hold an up-or-down vote and cannot propose amendments or set procedural obstacles.
Currently, the U.S. business community supports granting the Obama administration "fast-track" authority, but labor unions and environmental organizations oppose it, demanding more say in trade agreements. In January this year, a bill for "fast-track" authority was introduced in Congress but was opposed by many Democrats and conservative Republicans. Trade experts say that without "fast-track" authority, the two trade agreements currently under consultation with Asia-Pacific countries and the EU will be difficult to pass.