The PRISM row threatens to bury a US ambitious geopolitical project – the creation of transatlantic free trade zone with the European Union (The Transatlantic Trade and Investment Partnership – TTIP). According to German weekly Der Spiegel, Brussels took it all seriously, especially the information about EU diplomatic offices being snooped on by the US National Security Agency (NSA). [1] The UK Financial Times reports the European Union has threatened to suspend two agreements granting the U.S. access to European financial and travel data. «We are experiencing a delicate moment in our relations with the U.S., our strongest ally. Mutual trust and confidence have been seriously eroded, and I expect the U.S. to do all that it can to restore them», Cecilia Malmstrom, EU Commissioner for Home Affairs, wrote in a letter addressed to Janet Napolitano, Secretary of Homeland Security, and David Cohen, Undersecretary of Treasury. [2]
Germany, France and the Netherlands, the EU economic leaders, are especially tough on the matter. «If it is confirmed that diplomatic representations of the European Union and individual European countries have been spied upon, we will clearly say that bugging friends is unacceptable», said Chancellor Angela Merkel's spokesman, Steffen Seibert. «We are no longer in the Cold War». Lode Vanoost, former deputy speaker of the Belgian parliament, believes that the main purpose of the US surveillance program is «economic spying» on the EU. «At the moment, the EU is negotiating a new free trade agreement with the United States», he noted. «Well, [now the US can gather] what their opponent is already discussing internally of strategy. That is one of the possibilities». Vanoost also believes that part of the reason for the spying was due to the decline in US economic strength. «On the economic level, [the US] is losing ground everywhere», he said. «Look at what the BRIC countries are doing. The EU is having stronger ties with Russia, with Africa, with Latin America. And the US doesn’t seem to get its economic priorities imposed as it used to. So what I see is a big risk for economic spying». He also added that there is «too much at stake» for there to be a total breakdown in US-EU bilateral relations, however, «behind closed doors there will be some very tough words» exchanged between EU and American officials. [3]
The European Union and the United States have been pursuing a transatlantic free trade zone agreement since the end of 2012. It is destined to interconnect the parties by a number trade and other economic accords. The consultations encompass agriculture, mutual investments, the regulation of tax collection, the introduction of mutually recognized medical standards etc. But there is also a «global dimension». An anonymous source form Brussels said the West is not going to make concessions to the dynamic economies of rapidly developing states, especially BRICS. It confirmed that the process of implementing an unprecedented initiative to create a common transatlantic market is on the way.
The plans to create a transatlantic free trade zone were announced at the February 8 European Union summit. A few days later US President Barack Obama came out in support of the measure. He devoted to this issue a significant part of his State of the Union address, a yearly delivered message by the President of the United States to a joint session of the United States Congress. Obama went to great length in order to emphasize the advantages of such an agreement in American citizen-friendly terms. According to him, it would boost US exports and bolster its competitive edge in rapidly growing Asian markets. Obama promised to «launch talks on a comprehensive transatlantic trade and investment partnership with the EU because trade that is free and fair across the Atlantic supports millions of good-paying American jobs». [4]
Talking about ambitious goals and potential advantages, José Manuel Durão Barroso, the President of the European Commission, described the pact as a «ground breaking game changer» that would serve as «a boost to our economies that does not cost a cent of taxpayer money». If the EU-US deal is done, it would be the world's largest agreement on bilateral trade in goods.
At present the United States and the European Union (EU) economic relationship is the largest in the world – and it is growing. The overall trade turnover exceeds $2 trillion. According to European Commission’s estimates the transatlantic agreement will yearly bring in to European producers over 60 billion euros, making goods cheaper and the distribution of resources more fair to get the ultimate prices down. As the Brussels calculations show, the agreement would increase the EU GDP by 0, 5%.
At that, not everything here is a silver lining. It’s a long time the idea of establishing a trade and economic union between the United States of America and the European Union has been discussed by experts and individual politicians. So far the idea has mainly inspired the Europeans, especially German Chancellor Angela Merkel. As far back as 2007 Germany came up with a package of proposals to harmonize the US and the EU economic and trade laws with an eye to subsequently conclude a free trade zone agreement. The US National Intelligence Council’s Global Trends 2025: A Transformed World – 2025 report predicts serious fluctuations in the world financial system, «The dollar is vulnerable to a major financial crisis and the dollar’s international role is likely to decline from that of the unparalleled «global reserve currency», to something of a first among equals in a basket of currencies by 2025. This could occur suddenly in the wake of a crisis, or gradually with global rebalancing. This decline will entail real tradeoffs and force new, difficult choices in the conduct of American foreign policy». The final impetus to the revival of the «economic NATO» concept has come due to the West’s concern over emerging strength of BRICS (Brazil, Russia, India, China, and South Africa). Still the project leaves much to be desired when it comes to concrete terms, besides it evokes geopolitical doubts. The contradictions between the United States and Europe are too deep. It’s not by chance Western media is so cautious when it comes to transatlantic economic partnership. It does not go beyond just mentioning the possibility of some accords. The US San Francisco Chronicle finds it possible to do away with trade tariffs going up to 3-4% on average today. It could increase the US GDP by 1, 5% and 0, 5% for the European Union. Until now it’s a purely hypothetical scenario. The United States already enjoys a free trade regime with South Korea but it has been introduced due to military and strategic reasons against the backdrop of lasting stand-off in the region. As the San Francisco Chronicle points out the European Union insists that the talks on a free-trade deal with the United States should start in parallel with discussions about NSA surveillance — addressing concerns raised by France. [5] At that, wishes remain to be wishes, but today quite often Brussels has to play by other actors’ rules. The crisis makes the EU reconsider its trade relations. So far, it has normally reached accommodations with weaker partners to give them access to markets in exchange for preferences. All the agreements have been concluded on the terms dictated by Europeans. Now it’s different, Europe is required to make significant concessions.
Talking about the relationship with United States, the EU has already ceded ground. In 2012 Brussels increased the quota for US-produced hormones-free meat. US beef export issue has been on the World Trade Organization (WTO) agenda for a number of years. A decision to permit its export to Europe may be coming soon. Actually, the intent to create a transatlantic free zone is an attempt by the both parties to tackle problems outside the WTO. The Doha round of talks, which started to reconcile mutual claims and harmonize laws, has been dragging on as long as for 12 years. According to experts, the current transatlantic agreement talks are to last for at least two years. Take the pipes and tubes issue, for instance, the markets are absolutely different, and it’s not about trading only, there are great differences in the scale of production and the current market situation.
Finally, the «special relationship» between Washington and London is an obstacle too. Great Britain is, as it has always been, the key European partner for the United States.
Talking about the «Foggy Albion» Zbigniew Brzezinski said in his book The Grand Chessboard that it has always been «America's key supporter, a very loyal ally, a vital military base, and a close partner in critically important intelligence activities». This kind of partnership may outweigh the advantages of free trade zone.
Actually, the free trade concept is popular around the world. The Central European Free Trade Agreement (CEFTA) is a trade agreement between non-EU countries in Southeast Europe. It came into existence 12 years ago being concluded as far back as in 1992. Hungary, Poland, Romania, Slovakia, Slovenia and the Czech Republic have left it for the European Union’s membership. As I have already mentioned, the United States has a similar agreement with South Korea – a large Asian market. The North American Free Trade Agreement (NAFTA) is an agreement signed by Canada, Mexico, and the United States, creating a trilateral trade in North America. The agreement came into force on January 1, 1994. It superseded the Canada–United States Free Trade Agreement between the U.S. and Canada. NAFTA provisions envisage the gradual elimination of tariffs and other industrial and agricultural trade barriers, the common rules on the protection of intellectual property rights and investments, the liberalization of services exchange and the creation of effective tools to tackle trade disputes. As one can see it’s a long and complicated process.
The Transatlantic Trade and Investment Partnership presupposes tackling many more problems in comparison, for example, with NAFTA (the North American Free Trade Agreement). Electronic surveillance against Europe is an illustration of how the United States achieves unilateral advantages. The fact this information has come into the open will hardly help overcome the obstacles on the way of creating the «economic NATO»…
[1] http://www.spiegel.de/netzwelt/netzpolitik/nsa-hat-wanzen-in-eu-gebaeuden-installiert-a-908515.html
[2] The Financial Times, July 5, 2013.
[3] http://rt.com/business/nsa-free-trade-spying-477/
[4] http://www.whitehouse.gov/the-press-office/2013/02/12/remarks-president-state-union-address
[5] http://www.sfchronicle.com/news/world/article/Europe-wants-parallel-talks-on-trade-surveillance-4644564.php
