Well, I am not talking about two lovers, but the currently pending negotiation on the “Transatlantic Trade and Investment Partnership (TTIP).” The United States and the European Union, representing the world’s most advanced (and perhaps most open) economies, still cannot get a trade deal done between themselves. As we may recall, their initial ambition was to dismantle some of the hardest nuts to crack, i.e. non-tariff barriers (NTBs) between them. The problem is that one party’s legitimate regulation is a horrible trade barrier to the other party. One media outlet reported today that these difficulties would stall the negotiation.
For example, many European policymakers and consumers fear the invasion of the so-called “Frankenfood” (foods containing genetically modified organisms), hormone-treated beef and chlorine-drenched chicken. They believe that the EU should ban those products for the health and safety reasons. In stark contrast, one of the leading trade experts in the Unites States (Gary Hufbauer) was quoted to have said that “if our chickens are going to be excluded from their market because of this false prejudice, that's a big issue.” Of course, there are other hot-button issues between two parties, such as the investor-state dispute settlement mechanism.
Those controversial regulatory issues, which are often lumped together under the simplistic label of NTBs, may go beyond the “reciprocal bargain” dimension of typical trade talks. (If you are ever interested in this new dimension, check this out.) How could we bargain at all when we share so little? Are those issues subject to a give-and-take? What would you give and what would you receive in return? Perhaps both the U.S. and EU regulatory bodies should try harder to understand each other before they venture to strike a deal. Of course, as they say, it is easier said than done.
