The most ambitious aim of the transatlantic deal includes moving both sides towards greater regulatory convergence: harmonized regulations in the pharmaceutical sector, and common norms and standards in the service sector. Currently, foreigners cannot own more than 25 percent of a U.S. airline and foreign airlines cannot carry passengers between U.S. cities.
Top Senate trade officials warned that they would hold any free-trade agreement between the U.S. and the EU to rigorous demands that American companies see clear benefits.
Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Orrin Hatch (R-Utah) sent a letter to the U.S. Trade Representative Ron Kirk saying that some issues would have to be resolved before the talks move forward.
“There is no doubt that a U.S.-EU FTA is an enticing opportunity. While there is much promise in the U.S.-European Union relationship, there are remaining barriers to free and fair trade that are long-standing and difficult to overcome,” wrote the senators.
To meet some of the priorities outlined by the two senators, Europe would have to back off some of its agricultural restrictions. In particular, the senators urged trade officials to look at the EU’s policies on geographical indications – which grant certain products a protected designation of origin, such as champagne or Roquefort cheese – because they impede the ability of U.S. producers to compete.
“Broad bipartisan Congressional support for expanding trade with the EU depends, in large part, on lowering trade barriers for American agricultural products,” the two senators said.
Meeting their demands on agricultural regulations would certainly face oppositions from some European nations. For instance, the EU requires that all genetically modified foods be labeled, whereas the U.S. has no such restriction. The EU has also banned the use of hormones in cattle and the cultivation of genetically modified plants.
Generally, unions have opposed most trade agreements pursued by Democrats and Republicans alike on grounds of poor labor standards in U.S. trading partners. However, unions have joined other groups in support of the trade talks in hopes of using the deal as leverage to win stronger labor laws.
“We would hope that the U.S.-EU trade discussions would make improvements to how corporations treat their workers here,” George Kohl, a senior director at the Communications Workers of America (CWA), told The Hill.
Many European nations have stronger labor laws than does the U.S. France, for example, has notoriously rigid labor laws that make it harder for businesses with more than 50 employees to fire underperforming workers.
Despite widespread support, the free-trade pact may face a tough procedural path since Congress could amend any trade agreement now that the presidential fast-track authority has expired. Under the fast-track authority, the president has the power to negotiate trade agreements that Congress can review under limited debate, but cannot amend or filibuster. Congress must vote yes or no on the trade deal.
Republicans and business groups have led the charge to renew the fast-track authority since its expiration in 2007. Sens. Hatch and Baucus wrote in their letter that they would ramp up their efforts to renew the presidential authority, saying it will enable a successful completion of the free-trade agreement.