Pacific trade pact sails past a drifting transatlantic deal

When President Barack Obama and his top officials discuss his trade agenda they are at pains to mention two big sets of negotiations. There is the Trans-Pacific Partnership with Japan and 10 other Pacific Rim economies. And then there are the talks with the EU.

What is rarely discussed in public is the diverging paths the two endeavours are taking.

After more than five hard years of negotiation, the Pacific deal looks like it is nearing completion. It is top of the agenda for this week's visit to Washington by Shinzo Abe, the Japanese prime minister.

Things are looking starkly different for the Transatlantic Trade and Investment Partnership.

The discussions there are crawling along. Many negotiators and close observers now say it will be for the next US president to close a real deal.

One reason is the nature of the transatlantic talks. They are arguably much more complicated because they are focused on freeing up trade by finding a way to "harmonise" regulations. They have also been under way for less than two years, which makes them nascent in trade negotiating terms.

The other reason is politics.

The TTIP is rarely discussed in the US. But in Europe it has become contentious. In Germany and the UK critics contend a trade deal with the US would allow American multinationals to use supranational courts to require governments to withdraw environmental regulations or force the privatisation of public health systems. It would, opponents argue, result in the weakening of food safety standards and ease the way for highly processed American "frankenfoods" to land on European shores.

The fears are largely overdone. They are tinged with anti-Americanism and are the product of prodigious social media mythmaking by opponents.

Negotiators expect this kind of thing. What has riled Washington is the way EU officials, and particularly the European Commission, have responded. While political leaders such as Angela Merkel, Francois Hollande and David Cameron have spoken out regularly in favour of TTIP the perception in Washington is that Brussels has often chosen to bend to criticism rather than to take it on.

The clearest impact of politics so far on the talks has been on the investment negotiations commission suspended more than a year ago in response to a growing campaign by opponents against a provision that would allow investors to take disputes to arbitration panels.

But the latest example that US negotiators point to is last week's proposal by the commission to allow any member state to opt out of EU decisions approving the already heavily restricted use of genetically-modified organisms.

Viewed from the US, Jean-Claude Juncker, the commission president, and his advisers were playing to the gallery and ignoring the science with that decision.

US officials are convinced that were the commission proposal to become law it would be challenged easily at the World Trade Organisation.

But what really galls the US team is that just as Mr Obama is battling domestic critics over trade - many of them Democrats - Mr Juncker seems instead to be pandering to his.

European officials counter that the continent's politics are all about finding nuanced compromises and painting in shades of grey rather than the more partisan blacks and whites of US politics.

A faint hope remains that 2015 will be a year when tangible progress can be made on a transatlantic deal and that a sprint to the finish can begin next year.

The current reality looks much less inspiring. Inevitably, the transatlantic negotiations will drag on, quite possibly for years. But at some point, to produce a real transatlantic trade deal, something big will have to change in how the politics is handled. Until that happens closing trade agreements looks likely to remain a Pacific endeavour.

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