WASHINGTON – The outcome for a transatlantic trade deal remains in doubt during the run-up to the sixth round of negotiations, as environmental groups across the pond fight against an expansion of energy exports and any easing of safety standards.
“The trade deal is not really about trade so much as it is about deregulation,” said Bill Waren, trade-policy analyst for Friends of the Earth, an international environmental network. “And it’s really not so much about thoughtful deregulation as it is about lowering environmental safeguards in many key areas.”
The deal could potentially be the biggest trade pact in history, and would likely involve the trimming of tariffs on goods and services in all sectors. And trade representatives from both sides want to further open markets by removing regulatory “nontariff barriers,” raising concerns among environmental groups about possible reductions of environment, food safety and chemical standards.
Energy is a major focus of the Transatlantic Trade and Investment Partnership (TTIP), since the European Union wants to reduce energy dependence on Russia. European politicians are trekking to Washington to persuade lawmakers and the American public that a free market for energy exports is necessary to solidify links with Europe and increase security on both sides of the Atlantic.
“We have burned our way into a position of dependence. And as we see in Ukraine, Russia is quite capable of turning off the taps,” said General Secretary Anders Fogh Rasmussen of NATO in a speech at the Atlantic Council in Washington Monday. “If you have to depend on anyone, it’s better to depend on your friends.”
In an interview, Dominique Ristori, director of energy for the European Commission, said that Europe has become “more profitable for companies both in the EU and the U.S.” Ristori is thus “absolutely optimistic” about the future of an opening Transatlantic energy market.
The EU’s efforts to diversify energy sources, including increasing reserves, redirecting pipelines and vigorously developing renewable energy, won’t happen overnight. While all of this is going on, the U.S. has become a net exporter of coal and petroleum products, according to the U.S. Energy Information Administration.
Under the Natural Gas Act, the current U.S. law, the Energy Department automatically approves all liquefied natural gas shipments to or from countries with which the U.S. has a free trade agreement. If the proposed transatlantic partnership includes an energy chapter, oil companies would have the chance to start making unfettered exports of U.S. natural gas to European countries.
Environmental interests have voiced their opposition, saying approval of a trade deal would exacerbate the perils of hydraulic fracturing – “fracking” – and therefore create a greater greenhouse gas footprint.
“They are trying to use the Ukraine crisis and the insecurity of Russian natural gas supplies as a reason to lock in permanent export licensing provisions in the U.S. law,” Waren said.
“This is clearly the negotiating agenda of big oil companies like Chevron,” he added, “to keep Western economies hooked on the fossil fuels and also to protect the otherwise environmentally damaging practices that they use to extract fossil fuels, particularly fracking.”
Berlin-based grassroots environmental community PowerShift said that a leaked document from the talks indicates the pact would also raise the EU’s reliance on energy imports and slow down the development of renewable energy programs.
“This provision has implications for both natural gas and crude oil exports from the U.S. to the EU,” PowerShift said in a report released in January.
It’s presently illegal to export crude oil that was domestically produced in the U.S. Lifting the restriction would bring the price of U.S. oil in line with international prices, which means an increase of $10 per barrel or more, according to Oil Change International. The price hike would lead to 9.9 billion barrels of additional U.S. oil production between 2015 and 2050, which amounts to pouring 4.4 billion tons of CO2 into the atmosphere when burned.
U.S. oil production giants Chevron Corp. and Exxon Mobil Corp. are actively lobbying for the Transatlantic pact in both Washington and Brussels. But the chemical and manufacturing industries, two major consumers of gas and oil that would be hurt by a price hike, also have a strong lobbying presence on Capitol Hill.
U.S. trade representatives have had “hundreds of meetings with the Hill on T-TIP,” including one-on-one, committee, caucus and staff level meetings, said USTR spokesman Trevor Kincaid. But with the mid-term election in November, Congress is unlikely to step into the debate.
Sen. Edward Markey, D-Mass., however, came out in opposition to exporting crude oil in a statement Tuesday. “Attempting to use a Transatlantic trade agreement to scuttle established U.S. law prohibiting the export of America’s oil would be a titanic mistake for our consumers, national security and energy policy… [It] is not the answer for anyone but oil companies.”
In addition to resistance to energy exports, Europe-wide environmental groups are fearful of a deeper penetration by U.S. businesses. The British human rights group, War on Want along with British trade unions and activists, launched protests Thursday to fight against the proposed Transatlantic deal.
Although both the U.S. and EU adhere to the World Trade Organization’s Agreement on Sanitary and Phytosanitary Measures, the EU has an additional “precautionary principle.” It limits imports of U.S. genetically modified goods, hormone-treated beef and chlorine-washed poultry products to protect EU consumers.
U.S. farmers and food makers hope to challenge that ban through the transatlantic agreement. In a letter to the U.S. trade representative, American Farm Bureau Federation’s Public Policy Director Dale Moore said the Farm Bureau is against the European Union’s strict approach to approving biotech products. “We oppose the adoption and usage of a ‘sustainability’ standard for agricultural products in these negotiations,” Moore said.
Philip Seng, president and CEO of the U.S. Meat Export Federation, also had some advice for U.S. Trade Representative Michael Froman. “An agreement that eliminates duties on beef and pork but leaves the EU’s hormone and ractopamine bans in place will be of limited value to the U.S. beef and pork industries,” Seng said in a 2013 letter.
The U.S. Chamber of Commerce argued that existing regulatory discrepancies between the U.S. and EU only lead to higher costs for companies that sell products in both markets – costs that are eventually passed on to consumers.
For instance, consumers would save up to seven percent on each car or truck if automakers didn’t have to run two crash tests to comply separately with EU and U.S. safety standards, according to Chamber President Tom Donohue, in an April speech in Germany.
“There is more resistance in Europe at the moment to this agreement,” said Josh Meltzer, a fellow at the Brookings Institution, a Washington-based think tank. “That’s the perception in Europe that the agreement will lead to lower health and food safety standards.”
The disputes cast a shadow on German Chancellor Angela Merkel’s ambitious plan to complete the trade deal by the end of 2015.
“This one is going to be particularly complicated given the nature of the issues they are looking at,” Meltzer said in a telephone interview. “Not much is going to happen this year because of the parliamentary election in the EU and election of commissioners. Then next year will run to a presidential cycle, which will slow things down.”
U.S. trade officials are prepared to “let the substance of the agreement drive the timeline,” however long it takes, said spokesman Kincaid. “Currently, we’re in this hyper-technical period in which both sides are evaluating their own policies and trying to determine what options exist to chart a path forward as the leaders outlined,” he added in a subsequent email.
Negotiations resume in Brussels on July 14.
The outcome for a transatlantic trade deal remains in doubt during the run-up to the sixth round of negotiations, as environmental groups across the pond fight against an expansion of energy exports and any easing of safety standards.
“The trade deal is not really about trade so much as it is about deregulation,” said Bill Waren, trade-policy analyst for Friends of the Earth, an international environmental network. “And it’s really not so much about thoughtful deregulation as it is about lowering environmental safeguards in many key areas.”
The deal could potentially be the biggest trade pact in history, and would likely involve the trimming of tariffs on goods and services in all sectors. And trade representatives from both sides want to further open markets by removing regulatory “nontariff barriers,” raising concerns among environmental groups about possible reductions of environment, food safety and chemical standards.
Energy is a major focus of the Transatlantic Trade and Investment Partnership (TTIP), since the European Union wants to reduce energy dependence on Russia. European politicians are trekking to Washington to persuade lawmakers and the American public that a free market for energy exports is necessary to solidify links with Europe and increase security on both sides of the Atlantic.
“We have burned our way into a position of dependence. And as we see in Ukraine, Russia is quite capable of turning off the taps,” said General Secretary Anders Fogh Rasmussen of NATO in a speech at the Atlantic Council in Washington Monday. “If you have to depend on anyone, it’s better to depend on your friends.”
In an interview, Dominique Ristori, director of energy for the European Commission, said that Europe has become “more profitable for companies both in the EU and the U.S.” Ristori is thus “absolutely optimistic” about the future of an opening Transatlantic energy market.
The EU’s efforts to diversify energy sources, including increasing reserves, redirecting pipelines and vigorously developing renewable energy, won’t happen overnight. While all of this is going on, the U.S. has become a net exporter of coal and petroleum products, according to the U.S. Energy Information Administration.
Under the Natural Gas Act, the current U.S. law, the Energy Department automatically approves all liquefied natural gas shipments to or from countries with which the U.S. has a free trade agreement. If the proposed transatlantic partnership includes an energy chapter, oil companies would have the chance to start making unfettered exports of U.S. natural gas to European countries.
Environmental interests have voiced their opposition, saying approval of a trade deal would exacerbate the perils of hydraulic fracturing – “fracking” – and therefore create a greater greenhouse gas footprint.
“They are trying to use the Ukraine crisis and the insecurity of Russian natural gas supplies as a reason to lock in permanent export licensing provisions in the U.S. law,” Waren said.
“This is clearly the negotiating agenda of big oil companies like Chevron,” he added, “to keep Western economies hooked on the fossil fuels and also to protect the otherwise environmentally damaging practices that they use to extract fossil fuels, particularly fracking.”
Berlin-based grassroots environmental community PowerShift said that a leaked document from the talks indicates the pact would also raise the EU’s reliance on energy imports and slow down the development of renewable energy programs.
“This provision has implications for both natural gas and crude oil exports from the U.S. to the EU,” PowerShift said in a report released in January.
It’s presently illegal to export crude oil that was domestically produced in the U.S. Lifting the restriction would bring the price of U.S. oil in line with international prices, which means an increase of $10 per barrel or more, according to Oil Change International. The price hike would lead to 9.9 billion barrels of additional U.S. oil production between 2015 and 2050, which amounts to pouring 4.4 billion tons of CO2 into the atmosphere when burned.
U.S. oil production giants Chevron Corp. and Exxon Mobil Corp. are actively lobbying for the Transatlantic pact in both Washington and Brussels. But the chemical and manufacturing industries, two major consumers of gas and oil that would be hurt by a price hike, also have a strong lobbying presence on Capitol Hill.
U.S. trade representatives have had “hundreds of meetings with the Hill on T-TIP,” including one-on-one, committee, caucus and staff level meetings, said USTR spokesman Trevor Kincaid. But with the mid-term election in November, Congress is unlikely to step into the debate.
Sen. Edward Markey, D-Mass., however, came out in opposition to exporting crude oil in a statement Tuesday. “Attempting to use a Transatlantic trade agreement to scuttle established U.S. law prohibiting the export of America’s oil would be a titanic mistake for our consumers, national security and energy policy… [It] is not the answer for anyone but oil companies.”
In addition to resistance to energy exports, Europe-wide environmental groups are fearful of a deeper penetration by U.S. businesses. The British human rights group, War on Want along with British trade unions and activists, launched protests Thursday to fight against the proposed Transatlantic deal.
Although both the U.S. and EU adhere to the World Trade Organization’s Agreement on Sanitary and Phytosanitary Measures, the EU has an additional “precautionary principle.” It limits imports of U.S. genetically modified goods, hormone-treated beef and chlorine-washed poultry products to protect EU consumers.
U.S. farmers and food makers hope to challenge that ban through the transatlantic agreement. In a letter to the U.S. trade representative, American Farm Bureau Federation’s Public Policy Director Dale Moore said the Farm Bureau is against the European Union’s strict approach to approving biotech products. “We oppose the adoption and usage of a ‘sustainability’ standard for agricultural products in these negotiations,” Moore said.
Philip Seng, president and CEO of the U.S. Meat Export Federation, also had some advice for U.S. Trade Representative Michael Froman. “An agreement that eliminates duties on beef and pork but leaves the EU’s hormone and ractopamine bans in place will be of limited value to the U.S. beef and pork industries,” Seng said in a 2013 letter.
The U.S. Chamber of Commerce argued that existing regulatory discrepancies between the U.S. and EU only lead to higher costs for companies that sell products in both markets – costs that are eventually passed on to consumers.
For instance, consumers would save up to seven percent on each car or truck if automakers didn’t have to run two crash tests to comply separately with EU and U.S. safety standards, according to Chamber President Tom Donohue, in an April speech in Germany.
“There is more resistance in Europe at the moment to this agreement,” said Josh Meltzer, a fellow at the Brookings Institution, a Washington-based think tank. “That’s the perception in Europe that the agreement will lead to lower health and food safety standards.”
The disputes cast a shadow on German Chancellor Angela Merkel’s ambitious plan to complete the trade deal by the end of 2015.
“This one is going to be particularly complicated given the nature of the issues they are looking at,” Meltzer said in a telephone interview. “Not much is going to happen this year because of the parliamentary election in the EU and election of commissioners. Then next year will run to a presidential cycle, which will slow things down.”
U.S. trade officials are prepared to “let the substance of the agreement drive the timeline,” however long it takes, said spokesman Kincaid. “Currently, we’re in this hyper-technical period in which both sides are evaluating their own policies and trying to determine what options exist to chart a path forward as the leaders outlined,” he added in a subsequent email.
Negotiations resume in Brussels on July 14.
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