THE UNITED States and the European Union continue moving toward a free-trade pact known as the Transatlantic Trade and Investment Partnership (TTIP). Last week, E.U. trade ministers agreed on a common opening position for negotiations, enabling President Obama and British Prime Minister David Cameron to say, on the sidelines of the Group of Eight Summit on Monday, that talks would begin next month in Washington. Touting the deal, Mr. Cameron said it could add $415 billion per year to the global economy, divided roughly evenly among the United States, Europe and everyone else. Mr. Obama pledged the deal is “going to be a priority of mine and my administration.”
That’s the good news. The less good news is that negotiating TTIP — never an easy proposition given all the interests, and interest groups, of the United States and 27 E.U. member states — appears to be getting more difficult before bargaining begins. The revelation of global National Security Agency surveillance and an unapproved genetically modified wheat strain in Oregon have inflamed Europe’s most sensitive concerns about greater integration. Overblown as they may be, the fears are real and play into the hands of European protectionists.
Meanwhile, France made mischief within E.U. ranks by demanding and getting written into the E.U.’s opening bida “carve-out” for movies. This reflects a long-standing French fear that Hollywood products will swamp its protected, subsidized entertainment industry. It’s a fear that’s shared to some extent, and with greater reason, by small E.U. countries representing a few million or so speakers of their respective languages. It could have been easily addressed in later talks.
France insisted on this stand despite a clearly stated U.S. preference that both sides enter talks without such preconditions. Though the E.U. assuaged U.S. concerns somewhat by agreeing to reconsider the carve-out for movies if necessary, the damage has been done. Those in the United States who might want to oppose the deal have a talking point. Many supporters who once saw great potential for TTIP are lowering expectations, suggesting that a modest, long-term market opening is the most that can be expected.
It’s up to leaders on both sides of the Atlantic to rekindle the momentum and negotiate the broadest possible deal for ratification by next year. The case for TTIP is not strictly economic; indeed, it amounts mainly to removing the last nagging barriers, especially regulatory ones, on what is already a low-tariff trade flow. What gives it importance is its potential to cement strategic ties between blocs that are militarily allied and account for half of the world’s output — but have recently felt estranged as the United States looks to Asia.
To close the deal, the United States must get past its suspicions that Europeans are too fractious and too susceptible to the special pleading of French filmmakers and the like. The Europeans must do their best to avoid confirming those suspicions.