The European ICT industry was anxious to hear what President Obama would have to say in his State of the Union Address about the US trade agenda and in particular the much-talked about EU-US Free Trade Agreement. Indeed, the President announced the launch of talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union. In addition, a long overdue Final Report of the High Level Working Group on Jobs and Growth was released, along with a statement by the EU and US leaders saying that they will each initiate the internal procedures necessary to launch negotiations on the Partnership. We were so happy to hear the Obama-Van Rompuy-Barroso trio (finally) speaking in unison about their commitment to making transatlantic relationship an even stronger driver of the prosperity on each side.
The European ICT industry very much believes that this initiative can substantially improve the environment for conducting business on both sides of the Atlantic. The transatlantic economic relationship is already the world’s largest, accounting for a half of the global economic output. However, in practice, product requirements imposed under technical regulations in the EU and the US at times diverge substantially, even if underlying regulatory objectives are more or less the same. A more harmonised or compatible transatlantic market would have a positive effect on market growth by increasing the competitiveness of our industries and reducing their costs. Therefore we applaud the European Commission and the US administration for moving forward with the shared goal of reducing excessive regulatory costs, unjustified regulatory differences and other unnecessary red tape.
Excitingly, the EU and the US leaders are looking beyond what is usually covered in a bilateral trade agreement; their interest extends even beyond the regulation of the European and American markets. “Through this negotiation, the United States and the European Union will have the opportunity not only to expand trade and investment across the Atlantic, but also to contribute to the development of global rules that can strengthen the multilateral trading system.” proclaimed the EU and US leaders.
In its contributions to the debate, the ICT industry encouraged the EU and the US to jointly promote trade liberalisation and to address problems created elsewhere, such as requests to provide unnecessary confidential business information, or trade secrets, to show compliance with technical regulations and thus gain market access. The two partners should definitely work closely together to avoid forced localisation requirements around the world. Governments are increasingly requiring businesses to locate R&D, IP, manufacturing, etc. through the adoption of mandatory local standards or other technology mandates, burdensome conformity assessment schemes, local procurement content mandates, local data centre requirements, or other discriminatory measures as a condition for market access. A joint EU-US trade agenda should help discouraging such trade distorting requirements and commit both governments to push back on those measures wherever they occur.
The decision to include those elements rekindles hopes that the EU and the US will assume leadership for promoting multilateral free trade framework globally, thus hopefully starting a new wave of trade liberalisation. The EU and US together account for 30 percent of world trade. Considering the size of the transatlantic partnership, the EU and the US jointly promoting advanced trade rules will no doubt influence the development of international trade system.
The industry hopes that the EU and the US leaders, recognising the complexity of present supply chains involving a great number of countries, will construct an agreement which will address distortions to level playing field across the globe and bring progressive change. The time has come for the EU and the US to propose and promote deeper links between the world economies and a more progressive multilateral world trade framework.
While we fully realise the magnitude of the challenge, it is worth the effort as further trade liberalisation will release additional trade potential, create new economic opportunities and jobs, and hopefully reinvigorate much needed growth. The industry reaffirms that we are prepared to work actively both with the European Commission and the US administration to achieve the ultimate goal of trade liberalisation across the Atlantic and globally.
This blog was penned by Julia Jasinska, Manager Public Policy, DIGITALEUROPE