The European Union and the United States are due to begin their second round of free trade negotiations in Brussels on Monday, after US spying allegations threatened a breakdown in trust between the traditional allies.
The Transatlantic Trade and Investment Partnership talks were originally scheduled to take place in early October, but were postponed because of the US Government shutdown.
Since then, details have emerged about the extent of US espionage targeting citizens in several EU countries, prompting new concerns in Europe about entering into a free trade agreement with Washington.
“There are maybe some issues of trust that have been raised,” one EU official close to negotiations said on Friday. But he insisted that the matter would not be a subject for the trade talks.
“Spying is not an issue that we are discussing in TTIP — it is not even an issue on which the European Union has any particular competence,” the official said on condition of anonymity.
Intelligence issues fall under national authority in the EU.
Germany and France have decided to take up the espionage allegations directly with Washington, inviting other countries to follow suit.
From the start however, data privacy and cross-border data flow have been a key issue in the TTIP talks, alongside agriculture and food standards, and regulatory harmonisation — for example safety benchmarks in the car industry.
Tariffs between the EU and the US are already low, at an average of 4 per cent, meaning that the greatest gains can be made by cutting regulations, bureaucratic hurdles and other non-tariff barriers. The two sides also hope to lead the way on shaping global standards.
Both the US and the EU have vowed not to weaken their existing standards in the process. “We are not going to put in question the levels of protection,” the EU official reiterated Friday.
This week’s trade talks in Brussels are expected to focus on services, investment, energy and raw materials and on regulatory issues, according to the European Commission.
But negotiations are still at an “exploratory phase,” the EU official said, adding that it would take a further round to “identify more clearly where it is that we diverge, and which are the issues that may require some political impulse.” A third round of talks is due in mid-December in Washington.
The lead negotiators — EU Trade Commissioner Karel De Gucht and US Trade Representative Michael Froman — are planning to take stock of progress early next year, the EU official added.
Officials had expressed hope during the first round of talks in July that the negotiations could be wrapped up within 18 to 24 months.
The EU and the US already have the world’s largest bilateral trade relationship, making up 40 per cent of global economic output, according to the commission.
An ambitious TTIP deal could add €119 billion ($160 billion) to the EU economy and €95 billion to the US economy annually, the Centre for Economic Policy Research think tank has estimated.