Yesterday the US Commerce Secretary stated that the United States (“US”) is “open” to resuming negotiations with the European Union on the free trade agreement, known as the Transatlantic Trade and Investment Partnership “TTIP”.
He acknowledged that this had been in the sand since the election of Donald Trump to the White House, back in November of last year. Speaking on the American news channel, CNBC, Wilbur Ross, said, “It is wise to continue the TTIP negotiations and to work towards a solution which generally increases trade, and reduces our trade deficit.”
These statements mark a shift in the US administration’s position. They also come at a time when the US and Germany are crossing swords around diplomacy and trade. Originally launched in 2013, the TTIP negotiations are aiming to establish a vast free trade zone extending from one side of the Atlantic to the other. However, they came to an abrupt halt when Mr Trump was elected on the basis of an election manifesto with a protectionist bias.
One of his first decisions was to withdraw from another free trade agreement, the Trans-Pacific Partnership (“TPP”). This had been signed by the US with 11 countries from the Asian-Pacific region, including Japan and Australia. Mr Ross stated, “It was no coincidence that we withdrew from the TPP but not the TTIP.”
Until now, the current American administration has said very little about the TTIP, which has prompted major protest movements in Europe, on the basis of fear of deregulation. The administration thus merely indicated that it was considering “the status of negotiations” entered into with the European Commission, which is entitled to negotiate commercial agreements on behalf of member states, as the lead body.
At war over commercial deficits, the Trump administration appears to think that an agreement will enable the reduction of imbalances with the European Union, and in particular with Germany, by opening up these markets to American businesses.
Taking trade in goods in isolation, the US registered a deficit of $146.3 billion with the EU, of which $64.8 billion was with Germany alone. Traditionally, in contrast, the US has always had a trade surplus in services.