Trade Official Says U.S. Wants Deal With Europe

Trade Official Says U.S. Wants Deal With Europe

DAVOS, Switzerland — America’s top trade negotiator said late Saturday that President Obama was committed to reaching an agreement to smooth trade with the European Union, but only if it was written in a way that would overcome objections from farm groups and that could win congressional approval.

In an interview in Davos, Ron Kirk, the United States trade representative, responded to European leaders who in the last week renewed their calls for a United States-Europe deal to dismantle tariffs and other barriers, which they badly want as a way of stimulating their ailing economies.

At the World Economic Forum, David Cameron, the British prime minister, and Angela Merkel, the German chancellor, were among a number of leaders and business people pleading for a pact that would eliminate tariffs as well as regulations that impede trade. Even without changes, the United States and Europe already have the world’s largest trading market.

On both sides of the Atlantic, proponents have expressed frustration about the delaying of an official report by an American-European working group that would set the stage for formal talks. The delay has fed the widespread perception that Mr. Obama does not care much about a trade pact or, for that matter, about Europe in general.

‘‘We greatly value the trans-Atlantic relationship,’’ Mr. Kirk said in Davos. ‘‘We have devoted an extraordinary amount of time’’ to a possible trade agreement. But the administration wants to make sure objections from farmers and other constituencies are addressed, he said. Otherwise, officials might spend years negotiating an agreement only to have it rejected by Congress.

‘‘If we do this, we want there to be a bridge to somewhere and we want to get there on one tank of gas,’’ Mr. Kirk said. He declined to predict when talks might begin.
Trade had been a main topic of discussion at the World Economic Forum, which concluded Saturday. There were signs of progress toward a trade accord, which, if it proved durable, could provide a riposte to the eternal criticism of the elite event: that the annual Davos forum is nothing more an expensive cocktail party where little of substance is ever accomplished.

While it is true that Davos is rarely the venue for concrete agreements, the event attracts a diverse international crowd in an informal setting. It can be a place where political and business leaders work toward consensus on difficult issues like trade. That may have been the case in the past week, some of the people involved said.

‘‘I’m carefully optimistic we will kick off negotiations this year,’’ Alexander Stubb, the Finnish minister for foreign affairs and trade, said after a panel on trade issues at the forum Saturday. ‘‘It’s going in the right direction.’’

Friction-free commerce between the United States and Europe could create jobs and add an estimated $ 50 billion a year to the United States economy, Mr. Kirk said. European political leaders fervently want a deal to help their anemic economies grow. There is also strong support from business groups on both sides of the Atlantic.

‘‘Half a dozen senior leaders in Europe are ready to move forward,’’ Thomas J. Donohue, president of the U.S. Chamber of Commerce, said last week in Davos, adding that a deal could be concluded within 18 months if both sides set their minds to it.

But others are skeptical, noting that Europe and the United States have been talking about a trade deal for years. While American companies like General Electric have expressed strong support for an agreement, progress has always been stymied by objections from interest groups, particularly over agricultural issues. Some Europeans, for example, object to imports of American food containing genetically modified plants.

‘‘I was surprised to hear all the speakers saying it will happen in the next two years,’’ said Maximilian Zimmerer, chief financial officer of Allianz, a German insurance company. ‘‘What about the last 10 years?’’

Mr. Kirk declined to go into detail about what specific issues might be delaying a report by what is known as a High Level Working Group, which he leads along with Karel De Gucht, the trade commissioner of the European Union. A favorable recommendation by the group would set in motion the process of negotiating a comprehensive agreement.
But Mr. Kirk noted that members of Congress with farmers as constituents far outnumbered those whose districts included big companies like Boeing or Apple that would benefit from a trade deal. ‘‘Agriculture tends to be a challenging issue,’’ he said.

That is partly because American farmers are already on the lighter side of the trade scale. The European Union exports far more farm products to the United States than vice versa: 14.6 billion euros, or $ 19.7 billion, compared to 8.2 billion euros, according to European Union figures for 2011, the most recent available.

Mr. Kirk has announced plans to leave his post as trade representative next month, and Mr. Obama has not named his successor. But Mr. Kirk said that his departure would not impede progress toward a deal.

Mr. Kirk and others say the biggest benefits of a trade pact would come from eliminating regulatory barriers. For example, while both the United States and Europe have strict requirements on auto safety and emissions, the rules are different. Harmonizing the regulations would free carmakers like Audi from having to make costly changes in headlights, exhaust systems and other components in order to export them to the United States.

Synchronizing regulations is much more complicated than eliminating tariffs. But, Mr. Kirk said, ‘‘These are all problems that are solvable.’’
Some trade experts argue that even bigger benefits could come simply from streamlining official procedures involved when goods move across borders. The longer a product sits on a dock waiting for customs clearance, the greater the cost to companies and consumers.

A study by the World Bank and the consulting firm Bain & Company, published at the World Economic Forum, estimated that trade could increase by 15 percent if goods moved across borders more efficiently.

‘‘We’re talking about removing waste,’’ Mark Gottfredson, a partner at Bain, said. ‘‘Everybody can agree on that.’’


Leave a Reply

Your email address will not be published. Required fields are marked *