US, EU focus on tariff elimination, aim to finish trade pact by end of 2016

U.S. and European Union trade officials made significant strides to reduce a vast swath of tariffs in the latest round of talks and are now aiming to complete an agreement before President Obama leaves office.

The trade leaders breathed fresh life into the 2-year-old Transatlantic Trade and Investment Partnership (TTIP) during discussions in Miami this week, putting 97 percent of all tariffs on the table for elimination and intensifying discussions across some of the most difficult issues.

{mosads}“We continue to push hard for the goal of completing tariff elimination on products traded across the Atlantic, with tariffs on the overwhelming majority of goods being eliminated immediately upon entering the force of the agreement,” said Dan Mullaney, the chief U.S. negotiator on a conference call with reporters on Friday.

EU Chief Negotiator Ignacio Garcia-Bercero said that “both sides are now on a comparable level in terms of tariff line coverage.”

Efforts to complete the agreement have accelerated in recent months with an eye now on the end of 2016, which could potentially provide another significant trade victory for the Obama administration.

The economic powerhouses will pick up the pace of talks between formal rounds — the next meeting is expected in February — to make that ambitious deadline.

“The next four months are going to be important to our hopes of completing TTIP during the Obama administration,” Mullaney said.

“We believe it is important to try to finish these negotiations during President Obama’s presidency,” he said.

U.S. Trade Representative Michael Froman and the EU Trade Commissioner Cecilia Malmström met in Washington last month and agreed to move faster to wrap up the talks.

Tariffs between the two trading partners are already low but there are still some higher duties that could be cut to lower trade costs. 

“Each side retains tariffs and some in the double digits that discourage trade or make consumer products or manufacturing imports more expensive than they need to be,” Mullaney said.

Trade negotiators also stepped up work on meshing regulatory frameworks and finding agreement on opening markets for services and investment.  

“Services account for the large majority of economic output in both of our economies,” Mullaney said. “So our effort to identify new ways to secure and expand access to each others could be one of the most valuable pieces of an ambitious TTIP outcome.”

During the week, the United States and the EU discussed proposals for customs and trade facilitation, rules of origin, sustainable development, including labor and environment, the trade leaders said.

“Concretely speaking, during this round we have made substantial progress on market access for European and U.S. companies,” Garcia-Bercero said.

He said that the regulatory discussions were “particularly constructive and intensive ” on how to achieve greater compatibility in nine sectors, such as textiles, cars and pharmaceuticals.

Mullaney said that the United States has introduced proposals in nearly every proposed TTIP negotiating area.

The U.S.-EU talks were largely overshadowed by the Trans-Pacific Partnership discussions, which were completed earlier this month in Atlanta.