Economy & Finance

EU wants to include financial services in U.S. trade talks

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BRUSSELS (Reuters) – The European Union’s top trade official said on Saturday he wants financial services to be included in negotiations on an ambitious EU-U.S. free trade pact.

The United States and the 27-nation EU agreed last month to launch negotiations on a wide-ranging Transatlantic free trade agreement, but details of what the talks will cover have been limited.

The EU’s executive Commission approved a proposed European negotiating mandate last Tuesday but kept its contents secret.

The negotiating mandate must be approved by EU governments before the launch of negotiations, which the EU and the United States hope to start by June.

EU Trade Commissioner Karel De Gucht said on Saturday that financial services are among the sectors that he proposes to include in the negotiations.

“On financial services, you have two aspects – you have on the one hand the regulatory (aspect) and then you have the market access,” he told a conference organized by the German Marshall Fund of the United States, a group which aims to strengthen transatlantic cooperation.

He said the question of regulating financial services should not be part of the trade negotiation, although he said it was obvious that transatlantic discussions on this matter would continue independently.

“But, as far as we are concerned, market access in financial services should be on the agenda and that is also part of the mandate that we are asking (for) from … ministers,” he said in response to a question, without giving details.

The United States and the EU hope for a deal by the end of 2014 – a tight deadline in international trade talks.

The two sides believe a deal would add 0.5 percent to the EU economy and 0.4 percent to the U.S. economy by 2027, or 86 billion euros ($113 billion) a year for the Europeans and 65 billion euros for the Americans.

De Gucht has warned previously that the talks will be tough, with no “low hanging fruit”. Import tariffs between the two are already not high – an average of 4 percent.

Negotiations will focus on harmonizing standards, from car seat belts to household cleaning products, and regulations governing services. These help ensure exporters can compete.

Fleshing out the negotiating plans can cause friction. Last year it took EU trade ministers four months to persuade the European car industry to let Brussels officials talk to Japan about creating a similar free-trade pact.

(Reporting by Adrian Croft, Philip Blenkinsop- Editing by Jason Webb)

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