U.S. trade deal could be a lot for Europe to swallow

Dec 11 2012, 17:53 IST
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SummaryThe United States and the 27 member states of the European Union already have the largest economic relationship in the world.

Can Europeans, who have balked for years at many U.S. food imports, accept a free trade agreement with the United States that opens the door for imports of genetically modified crops and chickens cleaned with chlorine?

That's one of the big questions facing policymakers as the transatlantic trading partners, both hoping to boost exports to help their struggling economies, consider launching talks in 2013 on a free trade pact.

The United States and the 27 member states of the European Union already have the largest economic relationship in the world - and one of the most complicated.

Two-way goods trade totals more than $600 billion annually. Services trade, including sales by majority-owned U.S. or EU companies in each other's market, adds about $1.2 billion.

U.S. companies have invested around $1.9 trillion dollars in production, distribution and other operations in the EU, far more than in China or anywhere else in the world. EU companies have invested about $1.6 trillion in the United States.

Still, with each side desperate to spur job creation, President Barack Obama and European leaders formed a high-level working group last year to consider launching a free-trade pact.

A final report has been expected this month, but with the Christmas holidays fast approaching it could slip to January.

"What is still under discussion is whether we can figure out a way to do it," EU Trade Commissioner Karel De Gucht said last week. "I believe it will not be easy but that we have good prospects."

The idea has been kicked around for decades but never pursued, both because of the thorny agricultural issues and concern bilateral talks would sap energy from global trade negotiations, but those are now all but officially dead.

The tariffs the United States and EU have on each other's goods are relatively low and should cause few problems for negotiators aiming to eliminate them. But differences in regulation could be much harder to tackle.

EU FOOD BARRIERS "NON-SCIENTIFIC"

Nowhere is that clearer than in the agricultural sector, where the United States has been frustrated for years by what it considers the EU's "non-scientific" approach to food safety.

The EU has blocked imports of U.S. genetically modified corn and soybeans, poultry treated with chlorine dioxide, beef treated with lactic acid to kill pathogens and pork produced from hogs fed ractopamine, which promotes lean meat growth.

In other words, many U.S. farm products exported to other markets are not welcome in Europe, even though the United States

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