The EU-US Transatlantic Deal Motivated by China’s Rising Clout

Written by | Thursday, June 19th, 2014

Exclusive Interview with David Camroux (Paris Institute of Political Science)

EUBULLETIN has talked to Professor David Camroux –Senior Lecturer in Asian Studies at Sciences Po in Paris – about EU and US motivations to conclude the EU-US Transatlantic Trade and Investment Partnership (TTIP) negotiations and also about TTIP’s broader geopolitical implications, particularly in the context of the US’ effort to concurrently conclude a Trans-Pacific Partnership (TTP) agreement.

EUBULLETIN: After the landmark free trade agreement (FTA) deal between the EU and Canada was concluded in October last year, two other major FTAs are currently being negotiated – the TTIP and TTP. While analysts agree that both of the deals will be very difficult to negotiate, can you personally estimate which one is more likely to be concluded first and why?

D.Camroux: The Transatlantic Investment Partnership (TTIP) may come first before the Transpacific Partnership (TPP) for a number of reasons: First of all, there is political will on both sides which is, I think, stronger than in the TPP case. You have problems with Japan, in Malaysia, you know, that can make it more difficult to reach the TPP deal.
The second reason is the US Congress; the Republicans are going to give a hard time to Obama on any free trade agreement. The Democrats said they would not do anything until about the November mid-terms. I also looked at some of the US union’s comments and US trade unions are much more critical of the TPP than they are of the TTIP and this is for a simple reason: The European labor regulations are probably superior to those in the US where few are up to the European standards. The US labor unions are much more concerned about the competition and specifically the low cost of labor in the Asia-Pacific than they are about the European competition.

EUBULLETIN: What about Japan and the EU’s attempt to negotiate an FTA deal with this Asian economic powerhouse?

D.Camroux: As to Japan, the US would not be concerned about the cost of labor there but the main stumbling point in the TTP negotiations would be agriculture. The EU knows this because it is also negotiating with Japan. The EU already has this EU-Korea FTA which was a success – the fact that Korea may think that it had given up too much is a result of a pure power asymmetry. But the whole point about the EU agreement with Japan, as with its agreement with Canada, is that they had the same strategic objective, which was to set the benchmark and create a lever afterwards to be used during the negotiations with the US.

EUBULLETIN: What are the other reasons for your optimism that the TTIP will be concluded first, before the TTP will?

D.Camroux: Well, the third reason is procedural. I mean it is easier to negotiate a bilateral agreement between the US and the EU, even though the EU is a complicated actor with its two-level game approach. But, after all, it is a procedure between both transatlantic partners that is well tried and which works and which has yielded results. So, I think the third reason why the TTIP will come in first before the TPP is the procedural or the process question.

EUBULLETIN: Do you agree with the argument that the EU should be quite concerned about the US succeeding in concluding both the deals which may be a game-changer? Is the US trying to negotiate the FTAs both with the EU and with the Asia-Pacific nations to use it as a powerful leverage?

D.Camroux: Well, they are both seen as being directed against China in the end. And, in fact, both TTP and TTIP are all about regulations, about regulatory frameworks. The Transatlantic Agreement is also all about investment regulations. The important thing for investment is the investment climate. I mean that trade facilitation and lowering tariffs has gone pretty far anyway. So that’s why the Singapore FTA has focused mainly on public procurement, intellectual property rights, and about other regulations. And this leads me to the fourth reason why the TTIP agreement will come first and this is China. It is in both in the US and European interest to agree on a common regulatory framework in relation to China. Therefore, I don’t think that the EU would be negatively affected by the TTP because both the EU and the US will work hard to set the framework which would mean that China would have to accept this set of norms and regulations.

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