What are some roadblocks preventing a free trade agreement between the EU and the US?

Question

Despite the US being the EU’s largest trade and investment partner, there is no dedicated free trade agreement between the EU and the US. The Transatlantic Trade and Investment Partnership (TTIP) negotiations were launched in 2013, but ended without conclusion at the end of 2016. They were formally closed in 2019. Nevertheless, transatlantic trade continues to enjoy one of the lowest average tariffs (under 3%) in the world, governed by World Trade Organization (WTO) rules.

https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/united-states_en

You would think that because the US is such a big market, the EU would have done a lot to get a free trade deal done and vice-versa, but surprisingly enough such a trade deal never became reality. What are some roadblocks preventing a free trade agreement between the EU and the USA?

Answer 1

First you can see the lengthly TTIP negotiations as proof that the US and the EU were definitely trying to get a free trade agreement. Here are a few points that made getting a free trade agreement difficult.

Going from an average of 3% tariffs to 0% or maybe only 1 or 2% is not such a big difference, the economic gain is relatively small. The 3% are also average tariffs. For a lot of products the tariff is actually zero and for every product where it is higher there is some reason why it is higher and some group that will defend that tariff.

So the negotations about TTIP were mostly not about tariffs but rather about services and recognizing each others legal standards. This is a lot more complicated that just agreeing to reduce the tariff for some widget by a couple of percentage points.

The EU is a collection of a 27 individual states, so the EU can't just make promises on its own but needs to get the agreement of all its member states. The US is a federal state, so for a number of topics the US can only speak for its federal government. What the individual states will do is outside of the federal jurisdiction and hence cannot be included in a trade deal.

The general EU approach to customer safety of products is that a company needs to prove the safety of the product before being allowed to sell it on the market. If it happens to be unsafe afterwards the liabilities are limited. The general US approach is that companies are allowed to bring products to the market first but suffer huge liabilities if the products turn out to be unsafe. Neither approach is fundamentally better than the other but they are incompatible with each other. As neither side is willing to fundamentally change their approach recognizing each others as equivalent just doesn't work.

Finally the EU and the US are of approximately equal size. This means neither side can just bully the other one into signing a trade agreement. In a lot of other trade agreements, one side is much bigger than the other so it can just impose its ideas. The smaller side then only has the choice between a good but not great deal or no deal and hence will sign. This doesn't work here, they need an agreement that both sides are genuinely happy with. This is much harder to achieve.

Answer 2

Part of the answer was public sentiment. A few currents of public opinion converged here:

• The European political left is traditionally anti-American, and much of the moderate populace is America-skeptical.
• The left, including the moderate left, is rather pro-regulation concerning product, workplace and environmental safety, workers' rights etc.
• Each tariff has a particular interest supporting it, akin to tax exceptions and subsidies. Like those, they are notoriously difficult to abolish, even if they are overall detrimental. On occasion, the particular interest coincides with a strategic or public interest (ensure European autonomy regarding some strategic items) which makes it even more difficult.
• Some of the free trade negotiations concerned food, which is an exceptionally delicate, so to speak, topic. Food is an expression of culture and as such is used to define oneself and distinguish oneself as a group.

All these social, cultural and and psychological currents could be examined in the case of the famous "Chlorhühnchen" (chlorine chicken).

In the U.S., chickens are routinely rinsed with a chlorine solution prior to packaging to reduce the bacteria load, increasing customer safety. This practice is forbidden in the E.U., and customers, including your author truly, had pretty strong opinions about it. Among health concerns, an argument that resembles objections against geo-engineering was made: Simply sterilizing bacteria-laden chickens masks bad production practices; the bacteria load should be minimized by producing at higher standards, not through after-the-fact remedies.

The "chlorine chicken" became a sort of meme for everything that is wrong with free trade, and TTIP in particular.

The following chart from a pro-free trade essay by the Adam Smith Institute ("using free markets to create a richer, freer, happier world") illustrates customer sentiment nicely. The question was:

"Do you trust European or American food saftey [sic] standards more?":

(Note: As the commenters found out, the chart accidentally swaps the two tall columns — Americans have less trust in their own regulators.)

The trust Germans have in U.S. food safety is immeasurably small. (If it is any consolation: They are also somewhat skeptical towards their own.) It is no stretch to assume that the opinion about regulation in other fields, like the mentioned labor and environment, was similar. Generally, the argument was that products that are only cheaper due to a disregard for workers, environment, product safety and quality should not be allowed to squeeze out the high-quality, high-standard European ones.

Answer 3

There were a lot of stumbling blocks and hurdles with TTIP, but here are two major ones:

In 2016, the United States elected a President who ran on a platform of Isolationism and Protectionism, and had specifically criticized free-trade agreements. Obviously, there is not much to gain in continuing to negotiate a free-trade agreement between two partners when one of the two partners wants no free-trade agreements. There was some interest in restarting the negotiations in 2021, but as-of 2022, it became clear that there is a good chance Donald Trump will be elected again in 2024. So, there is really no point in doing anything until either Trump loses in 2024 or a President more sympathetic to free-trade agreements takes office in 2029.

And secondly, the process was very in-transparent and non-democratic. The drafts were classified and were not shared with the constituents. They were only allowed to be read by a small group of people, and under almost comically restrictive conditions: the drafts were not allowed to be transmitted electronically, only on paper. They were laid out in special secure reading rooms. Readers were not allowed to take them with them. Readers had to surrender their electronic devices and even pen and paper before entering the room. They were only allowed to take limited notes, on paper that was provided to them and was watermarked with their name.

Some of those secure reading rooms were only open on certain days of the week. Some MPs had to travel quite a bit to get to the nearest secure reading room. Even a world record speed reader would have trouble reading (and comprehending!!!) the entire treaty within the allocated reading time.

One consequence of the secrecy was that MPs were not allowed to discuss the treaty with their constituents. How do you expect democracy to work if the representative of the constituents wants to accurately represent the constituents' preferences but is not allowed to tell the constituents what the representative is voting on? "Should I vote Yes or No?" – "What's the question?" – "Can't tell you."

This secrecy drew a lot of criticism not only from transparency groups but also parliamentarians.