Trump’s Trade Truce With Europe Has a Familiar Feel: It Mirrors Obama’s Path

[ad_1]

Germans were among the most strident opponents of a trans-Atlantic trade deal, even though the country’s auto industry was strongly in favor of removing tariffs. In 2016, thousands of people marched in Berlin to protest the proposed deal.

When Mr. Trump was elected, the negotiations fell apart.

One of the most toxic parts of the prior deal, an investment court that allows businesses to sue governments for unfair treatment, would likely not be part of future talks. Mr. Trump’s advisers have criticized these courts and insisted on removing them from Nafta.

Opposition groups signaled on Thursday that they would keep a close eye on what emerges from this new attempt to dismantle trade barriers.

“Any trade talks between the world’s two biggest economies must not start a race to the bottom, jeopardizing hard-won protections for labor rights, public health, sustainable agriculture and the environment,” Shira Stanton, a trade policy strategist for Greenpeace, said in an emailed statement. “If the E.U. and U.S. try again to water down essential safeguards behind closed doors, they should expect the same public opposition.”

Then there are the practical hurdles to negotiating a trade pact, a process that typically takes years.

To abide by World Trade Organization rules, any future pact would have to cover nearly all trade between the United States and the European Union, which makes it hard to exclude many sectors. Although Europeans have said agriculture will not be included in the talks, many other industries, from manufacturing to services, may fight back against efforts to slash the tariffs and regulations that protect them.

There may be ways to finesse those rules, which the Europeans are anxious not to openly flout. When Japan and the European Union signed a trade pact earlier this month, they phased in some provisions over 15 years to blunt the impact.

“If they want to do it, they can,” said Mr. Felbermayr. “A trade war would be a lot worse than a free trade deal, and no one is going to object.”

[ad_2]

Source link