EU hopes to conclude US free trade deal 2016

The EU hopes that talks on the world's biggest free trade deal with the United States can be completed next year, a senior official said Tuesday, as the two sides get down to tackling the toughest issues.

In an interview with AFP, EU Trade Commissioner Cecilia Malmstroem said she will meet US Trade Representative Michael Froman in Washington in September to prepare the next round of negotiations on the Transatlantic Trade and Investment Partnership (TTIP) in October.

"We will put everything on the table, see where we are and how to advance," she said, in order to strike a deal between two giant economies which are home to some 850 million people and account for about half of global output.

"I hope we will be in a position to make joint announcements with Mr. Froman to give substance to the negotiations," the former Swedish politician added.

The previous working sessions were essentially technical and the tenth round, which was held in Brussels last month, made progress but only by avoiding discussions on the most sensitive issue -- the private investor dispute settlement system demanded by Washington.
"For now, the negotiations are very difficult to sell in the European Union because they have yielded nothing concrete," she said.

Earlier this year, Malmstroem proposed creating an international investment arbitration court to hear disputes in an effort to bridge the gap over what is known as the Investor-State Dispute Settlement (ISDS) system.

Washington has included ISDS provisions in all its free trade accords, but in the EU many feel it gives private companies too much power to challenge governments and force them to change policy, undercutting democratic oversight.

- Political impetus needed -

The TTIP talks began optimistically in 2013 but have gotten bogged down amid growing reservations in the EU, especially over the ISDS issue.

"We must give more of a political impetus to the talks," she said.

Malmstroem said EU negotiators also expected "very difficult talks on opening up" government contracts, especially given the "Buy American" policy which favours US companies bidding for public procurement business.
"The talks on public procurement have not yet begun. They will occur in the autumn but I have no illusions: The Americans will not give up on the 'Buy American' clause," she said.

"We must rebalance, because in the markets, Europeans are more open than Americans and we therefore want to obtain concessions from them," Malmstroem added.

Talks on agriculture will also be complex as Brussels seeks to have tariffs lifted on wine, chocolate and cheese.

"It's very difficult to export cheese to the United States because of tariffs but also because of health codes," she said, adding the EU will not obtain a total lifting of duties on sensitive products.

The commissioner said she hopes to finalise the negotiations in 2016, just before US President Barack Obama's term ends.

"It's the optimistic scenario. I am not hiding this," Malmstroem said. "I have time. I'm on duty until 2019."