It is increasingly clear that severe differences over cars and farming mean a mega deal will have to wait. Instead, any near-term deal will focus on regulatory cooperation on topics such as car blinkers, cosmetics, insurance and driverless vehicles.<\/p>\n
Still, even that mini-deal is attractive. Trump wants a success story for the impending elections, while Brussels wants to create goodwill that will stop Washington following through on threats to impose higher tariffs on the European car industry.<\/p>\n
\nMalmstr\u00f6m stressed during a recent parliamentary debate that \u201cregulators made a lot of progress during the TTIP talks.\u201d<\/p>\n<\/blockquote>\n
Susan Danger, chief executive of the American Chamber of Commerce to the EU, said one school of thought for how to move forward is \u201cto do things piecemeal and address the low-hanging fruit.\u201d<\/p>\n
\u201cOnce you get some momentum up, people believe that things can be done, and then theyll do more things,\u201d she said.<\/p>\n
The \u201cearly harvest\u201d approach should enable EU and U.S. negotiators to avoid the toxic political backlash that killed the far more wide-ranging Transatlantic Trade and Investment Partnership negotiations, which collapsed in 2016. To its vocal critics in the EU, TTIP was cast as an American Trojan horse that would undermine Europes food and environmental standards.<\/p>\n
\u201cOf course business would like to have a more ambitious deal that, for instance, includes services \u2014 of course we would like that,\u201d said Luisa Santos, director for international relations at BusinessEurope, which represents companies from 34 countries. \u201cBut if the objective is to have a positive outcome in a relatively short period of time, then the scope needs to be limited.\u201d<\/p>\n
A peace deal on certification<\/h3>\n
Strategically, Lighthizer and Republican senators like Lindsey Graham, one of Trumps closest allies, hope that a swift truce with the Europeans will enable them to convince the president to team up with the EU against their real bogeyman on the trade front: China.<\/p>\n
Concretely, this means postponing more difficult discussions on slashing tariffs and focusing on the alignment of safety standards or certification for products like cars, chemicals and pharmaceuticals. \u201cThe more immediate focus is now on the area of regulatory cooperation,\u201d the European Commission said last week.<\/p>\n
But it also means doing a number of small side deals \u2014 such as an EU-U.S. agreement on drug inspections<\/a> inked last year \u2014 rather than aiming for a traditional, all-embracing trade accord.<\/p>\n
Elena Bryan, a former senior U.S. trade negotiator in Brussels, said this approach makes sense: \u201cIn most cases, tariffs are not the biggest barrier. Its often the behind-the-border barrier, in the form of different standards or other divergences. You need to address those issues to make the tariff reduction meaningful.\u201d<\/p>\n
Efforts to harmonize safety testing procedures, certification processes or product labeling across the Atlantic can draw on previous achievements from TTIP talks. The wastage of two differing testing and labeling regimes is a common bugbear of companies on both sides. A joint EU-U.S. report<\/a> from January 2017, published as TTIP was going into deep freeze, highlights the \u201cgood progress\u201d made on regulatory cooperation.<\/p>\n
EU trade chief Cecilia Malmstr\u00f6m stressed during a recent parliamentary debate that \u201cregulators made a lot of progress during the TTIP talks.\u201d<\/p>\n
Some business groups have already signaled areas they feel are ripe for negotiation. The American Chamber of Commerce to the EU put out a position paper<\/a> in March, recommending, for example, to harmonize testing and labeling requirements for cosmetics, a change that would save costs for companies who currently have to undergo different testing and labeling procedures on either side of the Atlantic.<\/p>\n
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