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After ACTA: Trans-Atlantic Partnership Agreement

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It's not often that trade agreements make it to the front page of the newspapers, but that's what happened on New Year's Day:

David Cameron has made the establishment of a free trade agreement between Europe and the US a key priority during the UK's leadership of the G8 group of richest nations this year.

In a letter to fellow national leaders in the group, whose economies make up more than half the world's output, the prime minister said expanding free trade was one of three areas he wanted them to focus on.

As well as making progress with discussions ahead of trade deals with Canada, Japan and Russia, Cameron wants the even bigger prize of an agreement, at least in principle, on a deal with the US. Such a treaty could reduce duties on goods traded between European Union members and the US or at least lower "non tariff" barriers such as harmonising standards for certain goods.

Of course, he's pushing at an open door here, in the sense that no one would object to expanding free trade and boosting employment at a time when many economies in the world - not least the UK's - are in serious trouble.

A few years ago, that would have been the end of the story: everyone would have nodded sagely and got back to doing something else while the negotiators drew up some boring agreement that was duly signed.

But something happened.

Not content with dedicated treaties developed under the aegis of WIPO, the copyright industries saw such general trade agreements as yet opportunity to impose their maximalist agendas. This led to chapters dealing with intellectual monopolies like copyright and patents not only being added to such agreements, but becoming the tail that wagged the dog. That can be seen from the fact that ACTA was killed in the European Parliament last year precisely because the chapter dealing with copyright and patents was regarded as so flawed that it vitiated the entire treaty, which had to be rejected despite other sections that were viewed very favourably by many MEPs.

Moreover, in the current negotiations for the Trans-Pacific Partnership (TPP) agreement, which is a kind of ACTA for the Pacific rim, it is once more the disproportionate demands of the copyright and patent world that threaten to scupper the entire treaty as countries rebel at the onerous terms the US is trying to impose.

That means the otherwise welcome trade agreement between EU and US is bound to have a similar chapter that attempts to push through many or most of the bad ideas that infected ACTA. There's already a precedent for this in CETA, the Canada-European Union Trade Agreement that I wrote about back in October last year. As I noted, the criminal sanctions there were directly modelled on ACTA's.

It now seems likely that the EU negotiators have come to their senses here, and realised that trying to sneak ACTA in through the back door via CETA would not only be a slap in the face for the people who took to the streets last year, but also to the hundreds of MEPs who voted against ACTA because of those measures. That would mean that the same MEPs might well refuse to approve CETA if it still contained those criminal sanctions.

That's possible, because CETA is not so critical to the European economy, and so standing up to the European Commission here is politically feasible. However, the proposed EU-US treaty is a very different matter. As David Cameron noted, taken together, the economies of the proposed partners make up around half the world's output, and a trade agreement could have a major impact on the European Union. The pressure to approve such a treaty would be immense. Indeed, the first signs of the coming campaign are already evident in this recent speech by Karel de Gucht, the EU commissioner who fought harder than anyone for ACTA [.pdf]:

Presidents Barroso, Van Rompuy and Obama already agreed in the summer that the best outcome - if we do launch negotiations - would be a comprehensive free trade agreement.

What is still under discussion is whether we can figure out a way to do it.

That is what we are working on right now and I am confident we will be able to deliver it very soon.

The reason I am confident is because this is the right deal at the right time for both of our economies.

Europe and the United States have many things in common but the most important of these right now is the need for growth.

As you can see, there he is already pushing the "need for growth" button that will doubtless become the key rationale for this move.

Interestingly, de Gucht goes on to mention other trade agreements as another reason why the EU and US should create their own:

European Union and the United States are moving ahead with other liberalisation projects.

When Europe's broad programme of free trade agreements comes into effect, companies from other countries and regions - like Canada, Japan, India and ASEAN - will have advantages that American firms do not. Likewise, a successful TransPacific Partnership negotiation would change the conditions on the American market for our businesses.

So the argument here is that there will soon be all this cat's cradle of trade agreements between the EU or US and other countries, so we need to match them with an equivalent one between the EU and US, or there will be dangerous asymmetries in world trade. The invocation of TPP here is significant, because it's a hint of the kind of "equivalence" negotiators will doubtless be seeking. Indeed, the new "Trans-Atlantic Partnership" or TAP as it might be termed, will doubtless be framed as balancing what TPP will bring about in the Pacific region - and thus "indispensable" for Europe if it is not to be "left behind" etc. etc.

Given that the stakes here are much higher than they were in ACTA - which was, after all, nominally about fighting counterfeits, rather than a general trade agreement - does this mean that it will be impossible to stop the worst elements of ACTA re-appearing in its chapters? Not necessarily.

The fact that this would be a huge, wide-ranging trade agreement may well strengthen the hand of politicians like de Gucht when it comes to putting pressure on MEPs to support it; but there's also a big countervailing effect. Here's how an article in Reuters explained the situation:

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.

More specifically:

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.

As this makes clear, in the US, the industry viewpoint that everything is safe until proven otherwise tends to prevail. And even when there is overwhelming evidence that things aren't safe, US industries tend to fight hard to rubbish it and the scientists behind it, as happened with tobacco and the cancers it causes, and as is currently happening with oil companies and climate change. The EU, by contrast, tends to adopt a precautionary principle that such things must be proven safe with reasonable probabilities before they can be unleashed upon the European public.

This will clearly be one of the most contested issues in the new TAP, not least because of comments like this from the US side:

Nick Giordano, vice president for the National Pork Producers Council, said he is optimistic the two sides will launch free trade talks and tackle the regulatory barriers.

But he warned that farm groups are prepared to go on the war path if their concerns are left out.

"We want this agreement to be a 21st century agreement, not a 19th century one," Giordano said. "On all these issues, the United States has the moral high ground."

I somehow doubt whether European consumer associations will regard US farmers as occupying the "moral high ground" here, just as many Europeans tend not to see Guantanamo Bay as a shining example of what the Pentagon insists is "a safe, humane and professional detention operation."

That means that ranged alongside digital activist groups that have already shown they can mobilise effectively against US-driven treaties seeking to impose harsh copyright enforcement measures, there are equally effective consumer groups who will be fighting tooth and nail to stop TAP leading to EU supermarkets being forced to sell chickens doused in chlorine dioxide and pigs fed growth hormones.

All-in-all, then, 2013 is already shaping up to be as interesting as 2012 as far as international trade agreements are concerned, and may well surpass it in terms of the breadth and intensity of the battles that will be fought in this arena. Happy New Year....

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