Trade

The Biggest Trade Deal Ever: U.S., Europe Head Into Negotiations


A tugboat moves a container ship to dock at the Port of Oakland in California on June 20

Photograph by David Paul Morris/Bloomberg

A tugboat moves a container ship to dock at the Port of Oakland in California on June 20

On July 8, 29 countries—the U.S. plus 28 countries of the EU—will begin negotiating The Biggest Trade Deal Ever. (France is threatening to delay the start of the talks over allegations that the U.S. spied on EU offices in the U.S. and Europe.) The Transatlantic Trade and Investment Partnership will affect 30 percent of global commerce, eliminate $10.5 billion in tariffs, and boost trade by an estimated $280 billion a year. European Union and U.S. industries are sending wish lists to the negotiators, who want a pact by the end of 2014. That’s optimistic: Talks will likely take years, and the treaty must be ratified by legislatures on both sides of the Atlantic. The U.S.’s last major trade deal, with Korea, began in 2006 and didn’t conclude until 2011.

Agriculture
Commodities
The EU limits imports of genetically modified foods, rules that U.S. farm groups are pushing to scrap.
Chicken
The U.S. poultry industry and companies including Campbell Soup (CPB) want to overturn EU rules blocking imports of U.S. chickens that are rinsed in chemicals. Only 2 percent of all U.S. poultry exports go to the EU.
Champagne
U.S. winemakers in existence before 2006 can use “champagne” on their labels under an older trade agreement the industry hopes to keep in place.
Cranberries
Fruit growers and manufacturers such as Ocean Spray want the EU to relax rules limiting imports of products treated with pesticides.
Tobacco
Companies including Philip Morris International (PM) and Universal Corp. (UVV) want to make sure the talks don’t put greater regulations on the crop.
Beef
U.S. ranchers and meat processors want the EU to lift a ban on ractopamine, a drug fed to cattle to make meat leaner. A concession may nudge the U.S. to allow imports of some EU beef—fears of mad cow disease have kept it out for more than a decade.

Services
Banks
The EU wants regulations of financial institutions to be part of the treaty. So do U.S. banks. The Obama administration—seeking to prevent U.S. banking rules from being watered down—is against it.
Wal-Mart (WMT)
The world’s largest retailer hopes to prevent regulations that would make it harder to sell its products online in Europe.
Telecoms
Cisco (CSCO), Nokia Siemens Networks, and others in the Telecommunications Industry Association have long complained that each EU country has different import and export rules for computer-encryption technologies. The industry wants one EU-wide policy.
Privacy
The EU is weighing a rule to expand digital privacy rights, including a provision giving people more control over the data they share online. The Coalition for Privacy and Free Trade, a lobby for Web companies and banks that would have to abide by the policy, wants one set of rules.

Intellectual Property
Drugs
U.S. law lets pharma companies keep proprietary data about some drugs secret for 12 years to guard against copycats; the industry wants the same protection in the EU, up from eight years now.
Music
The U.S. recording industry wants radio stations to pay music labels for playing their artists, as they do in Europe. Currently U.S. radio royalties go to songwriters only.
Hollywood
France, which subsidizes its entertainment industry to help it compete with Hollywood, is fighting to keep movies out of the talks. A U.S. film industry priority: shutting down any attempts to stifle online distribution.

Transportation
Couriers
FedEx (FDX) wants to loosen rules that restrict its ability to send trucks into historic sections of older European cities.
Shipping
The 1920 Jones Act requires that only vessels built, owned, and staffed by Americans carry cargo between U.S. ports. That prevents, say, a Dutch freighter leaving Baltimore from stopping in New York to drop off goods on its way back to Rotterdam. Lobbyists for European shippers want exceptions so they can carry cargo between U.S. ports.

Manufacturing
Vitamins
Austria, Bulgaria, Greece, and Cyprus prevent food supplements from being sold door-to-door. Herbalife (HLF) is one company that wants to change that.
Chemicals
The Sierra Club is fighting the American Chemistry Council’s push to bring the EU’s strict rules for chemical sales more in line with laxer U.S. policies.
Cars
On some European Mercedes-Benz models, the brake lights flash. On the U.S. versions, the lights are static. That’s because the two continents have different safety regulations for crash tests, lights, and windshield wipers. U.S. and European automakers—Ford (F), General Motors (GM), BMW (BMW:GR), and Daimler (DAI:GR) among them—want each continent to recognize the other’s rules.

Investment
Energy
Chevron (CVX) wants an arbitration system for resolving corporate disputes with governments. Critics such as Friends of the Earth hope to prevent that, saying the courts will uphold stronger standards.
Airlines
U.S. law bars foreign companies from controlling more than 25 percent of a U.S. airline. The EU is seeking to end that.
 
Data: Bloomberg Government, U.S. Census Bureau, Company and Industry filings with the U.S. Trade Representative’s Office, Centre for Economic Policy Research, Congressional Research Service, European Commission

Wingfield is a reporter for Bloomberg News in Washington.

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Companies Mentioned

  • CPB
    (Campbell Soup Co)
    • $44.82 USD
    • 0.05
    • 0.11%
  • PM
    (Philip Morris International Inc)
    • $85.58 USD
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    • 0.37%
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